Clients of the top bank in Australia who had died years ago and about whom the bank had all knowledge where charged fees, admitted the bank.
It has bene years that the Commonwealth Bank of Australia (CBAUF) had been billing dead customers for financial advice, admitted the bank at a government inquiry on Thursday. A client of the bank who had passed away about a decade ago was being billed for advice by a members of the bank’s financial planning business in one of the cases.
The issue came to light during a Royal Commission, or a public inquiry into illegal business practices in the financial services industry in Australia.
Customers were billed for financial advice by the bank which was never received by them, admitted Commonwealth Bank’s executive general manager Marianne Perkovic during a hearing on Wednesday. And it is just a day after that revelation that the bank executive admitted of the malpractice of the bank of drawing fees form the accounts of clients who had passed away already.
In one of the most glaring examples, the bank had billed and charged a customer for financial services until recently even though the customer had passed away in 2004.
According to an internal document that was read out at Thursday’s hearing, the company recommended “a possible warning to the adviser” after the Commonwealth Bank had come to know of the incidents in 2015. Australia’s financial watchdog was not informed about the irregularities by the bank.
And those clients whom the bank had charged for advice that they never received have been refunded a total of 119 million Australian dollars ($93 million) till the end of 2017, said that bank on Wednesday.
In terms of market capitalization, the largest Australian bank is the Commonwealth Bank. On the issue of billing dead clients, there was no comments made to the media by a spokesperson for the bank.
The highest form of public inquiry in Australia is a Royal Commission. With the aim of restoring public confidence in the country’s financial sector, the latest Royal Commission was ordered by Prime Minister Malcolm Turnbull at the end of last year.
In recent years that has been a number of big scandals in the industry. such scandals include allegations of money laundering and interest rate-rigging. The findings of the commission is to submitted to the government in February 2019.
In recent months, accusations of bad behavior were levelled not only on the Commonwealth Bank.
Systematic misleading of clients was admitted to by Bank of America Merrill Lynch (BAC) last month for a period of five years on the manner in which the bank had handled orders for millions of stock trades.
(Adapted from Money.CNN.com)