Australia’s fee-for-no-service scandal is continuing to grow, with financial institutions forced to repay customers $260m after charging them ongoing fees without providing services.
The five biggest financial institutions – the Commonwealth Bank, NAB, Westpac, ANZ Bank, and AMP – have had to pay or offer customers $222.3m in refunds and interest for failing to provide personal advice to customers while charging ongoing advice fees in recent years.
This marks a further $6.4m in payments and offers from the “big five” since October last year.
The corporate regulator, the Australian Securities and Investments Commission (Asic), is also overseeing fees-for-no-service remediation programs by other licensees, including Bendigo Financial Planning Ltd, Police Financial Services Ltd (trading as BankVic), State Super Financial Services Australia Limited (trading as StatePlus), and Yellow Brick Road Wealth Management Pty Ltd.
The total amount now paid or offered to customers across both groups of licensees is $259.6m.
But Asic said the figure could grow as high as $850m if the total provisions set aside by the major banks for future remediation programs were paid in full.
The banking royal commission heard evidence for the second consecutive day from Paul Carter, the former executive general manager of wealth products for National Australia Bank/MLC.