Yahoo Finance Royal Commission recommends criminal referral
The Royal Commission into the financial services sector revealed widespread practices of fees for no service, fees charged to dead people and sales-driven cultures.
The final report, handed down yesterday, recommended the corporate watchdog, ASIC consider whether several financial services firms, including NAB, ANZ, AMP and the Commonwealth Bank should be referred for criminal charges.
Hayne warned that the charging of fees for no service could constitute a contravention of the Corporations Act carrying a maximum fine of $94.5 million.
However, Hayne didn’t name any individual executives.
In the massive document, Commissioner Kenneth Hayne said said ASIC’s approach, which saw AMP, CBA, NAB, Westpac and ANZ pay only $850 million to affected customers, was toothless.
Continuing, Hayne said NAB’s suggestion that the fact the banks gained the money didn’t mean they deliberately sought the money was flawed.
“The amounts of money that just ‘fell into the pocket’ of so many large and sophisticated financial entities, the number of times it happened, and the many years over which it happened, show that it cannot be swept aside as no more than bumbling incompetence or the product of poor computer systems,” Hayne said.
He also observed the CBA CEO, Matt Comyn’s admission that charging fees for no service was unacceptable.
Responding to the report, Treasurer Josh Frydenberg said the misconduct must end and promised to pursue all 76 recommendations in the report.
“You must put the interest of consumers first,” he told Australia’s financial giants.
“Consumers must be treated honestly and fairly. My message to the Australian community today is that your government is committed to making this happen.
“In responding to this report and taking action on all 76 recommendations, we are putting in place the legislative framework which provides the regulators with the powers and the resources to hold those who abuse our trust to account.”
NAB CEO Andrew Thorburn responded to the report this morning, claiming he was disappointed by Hayne’s assertion the bank and Thorburn weren’t learning the lessons they should be.
“While we have made mistakes, I believe there is a lot of evidence that we are making sustainable and serious change to once again regain the trust of all our customers,” Thorburn said.
“I am proud to be a banker; it has always been a profession of service. I am proud to be CEO of NAB, and am more determined than ever to lead NAB with even greater urgency and intensity and show through our ongoing actions that we do what we say.”
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