The banks and financial services institutions were blamed for charging fees for no service misconduct or non-compliant advice. The total calculated compensation amount for the losses to the customers was until 30 June 2022. For the first six months of 2022 alone, the six Australian financial giants compensated the sum of AU$438 million.
The six banking and financial giants are AMP, ANZ, CBA, Macquarie, NAB and Westpac.
Regulatory Reviews
The action came after two major ASIC reviews over the operations of the financial companies, which were conducted in 2016 and 2017.
The purpose of the regulatory reviews was to determine systemic failures in the advice divisions of the banks and also some of their product issuers. The failures on the part of the financial companies include charging fees for no services and for providing non-compliant advice by their advisers.
NAB paid the highest compensation amount: it distributed or agreed to distribute 772,235 customers compensation of AU$1.24 billion for no service misconduct and another $104.7 million to 2,727 customers for non-compliant advice.
Westpac, AMP and ANZ paid AU$942.1 million, AU$626.8 million and AU$217.3 million, respectively, for no service misconduct, and another AU$58.7 million, AU$48.5 million and AU$44.7 million, respectively, for non-compliant advice.
Macquarie paid the lowest AU$4.6 million to 1,105 customers for no service misconduct but did not have to compensate for non-compliant advice.
All the companies already paid the non-compliant advice compensation. However, they have different timelines to finish compensating customer losses for no service fee misconduct.
Earlier, the Australian Financial Complaints Authority revealed that it received 72,358 complaints in the past 12 months against financial services companies. Disputes with terms of the product between customers and service providers jumped 554 percent in the period.
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