POWERED BY MOMENTUM MEDIA
CBA to pay at least $32m in remediation actions
The Commonwealth Bank (CBA) is looking to pay at least $32,286,000 for customer and employee review and remediation actions.
In an update on its reviews on products and processes, CBA said while these actions were key milestones, it was not an exhaustive list of all regulatory matters.
CBA reviewed superannuation payments to its part-time employees working additional hours at single-time rates, and all employees and all types of payments going back eight years.
“The first tranche, which will commence shortly, is estimated to be $16.7 million plus interest, equating to an average amount per employee of approximately $463 plus interest. The expected total payments and program costs have been conservatively provided for in previous financial years,” CBA said.
In terms of the sale of Essential Super, the bank said it was in discussions with the corporate regulator after it expressed concern that some customers might have been given personal advice rather than general advice during the sale.
On deceased estates, the Australian Securities and investments Commission (ASIC) was notified on Monday about an issue affecting some insurance products, where for a number of accounts, a confirmation of the cancellation of an existing insurance policy may not have been sent to the deceased estate.
CBA said it expected that the number of customers to be affected would be below 1,000.
The bank is also looking to refund approximately $10 million, including interest, for around 65,000 customers who purchased Credit Card Plus insurance who may not have met the employment criteria, meaning if the need arose they may not have been able to receive certain benefits under the policy. The average refund would be approximately $154 including interest.
“These customers remain eligible for various benefits of Credit Card Plus insurance such as death and terminal illness, but may not have been eligible to receive benefits for involuntary unemployment, temporary and permanent disability. It was not intentionally sold to customers who were not eligible,” CBA said.
Another $586,000 will be refunded to approximately 9,600 customers, with an average refund of $61 including interest, for those who purchased home loan protection insurance and had been charged an incorrect premium amount or had incurred premium charges before the home loan was drawn down.
CBA also said it would be refunding approximately $5 million including interest, for around 355,000 customers for charges on disputed card transactions. Each customer will receive an average refund of approximately $14 including interest.
“In July 2017, we proactively notified ASIC that when refunding disputed transactions on customers’ cards, while the transaction itself was correctly reversed, certain charges associated with the disputed transactions were not always correctly adjusted,” CBA said.
Recommended for you
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
Cbus Super has unveiled Advice Essentials Plus, a new service offering affordable financial advice to both members and their partners.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
