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Banks, insurers hit with $1 billion bill for customer rip-offs

Business

Corporate Australia’s bill from ripping off customers has topped $1 billion, according to the Australian Securities and Investments Commission.

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ASIC said six of Australia’s largest banking and financial services institutions had paid or offered a total of $1.05 billion in compensation to customers who suffered loss or detriment because of fees-for-no-service misconduct or non-compliant advice.

This was $295.9 million more than allocated at the start of the year.

Almost one million customers were affected by the scandal, which was central to the Hayne Royal Commission. ASIC said customers may have been counted more than once.

ASIC said AMP, ANZ, CBA, Macquarie, NAB and Westpac undertook the review and remediation programs to compensate affected customers as a result of two major ASIC, which started five years ago.

The National Australia Bank has by far the biggest bill. Its compensation for fees-for-no-service has reached $368 million and affected 686,000 customers. The cost of its non-compliant advice has reached $52 million.

The AMP, which is still embroiled in scandals, has a bill of $145 million for its FFNS and $28 million for NCA.

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