CBA to refund ‘unauthorised fees’
COMMONWEALTH Bank has promised to pay back "unauthorised advice fees" it charged dead customers and will also refund living customers who have been charged fees for no service.
The announcement yesterday comes after embarrassing revelations at the royal commission that CBA advisers had charged dead clients fees.
A CBA audit of 142,000 accounts identified that 12 accounts for people who had died had been charged unauthorised fees between April and June 2018.
The lender identified the charges after an initial search of the accounts. It said it had now widened the search to cover seven years of records across all its advice licensees.
"Charging unauthorised advice fees to deceased estates is unacceptable," CBA wealth management chief operating officer Michael Venter said in a statement.
He said the moves were a direct response to issues raised by the financial services royal commission.
The bank also announced it will forgo $45 million in annual income from January 2019 by rebating grandfathered financial planning commissions and cutting fees on legacy wealth products.
"We support the removal of grandfathered commissions from superannuation and investment products across the wider industry and believe a legislative approach should be considered," Mr Venter said.
CBA, run by chief executive Matt Comyn who took over in April from Ian Narev, will rebate all grandfathered commissions to financial planning customers, benefiting about 50,000 customer accounts by approximately $20 million per year, and remove another $25 million in fees.
ANZ and Westpac have already said they will end grandfathered commissions. Commonwealth Bank has already paid approximately $270 million in compensation and interest to customers it provided with poor advice or charged fees for no service.
During royal commission hearings earlier this year, CBA and NVA admitted advice fees had been charged to dead superannuation and wealth management customers. AMP was also exposed for charging dead people fees for wealth management and for life insurance premiums.
CBA's announcement comes as the chief executives of the four major banks - CBA, Westpac, NAB and ANZ - prepare to face a grilling before Parliament's economics standing committee at hearings starting tomorrow. Committee chairman Tim Wilson said the hearings were an opportunity to "consider how best to ensure appalling behaviour is not repeated without inhibiting the banks' essential contribution to greasing our economy."