According to ASIC, six years after the issue was first self-reported by the banks to ASIC, only Macquarie and Westpac had conducted a full review to determine which customers were charged fees for no service.
ASIC commissioner Danielle Press said the institutions had taken too long to conduct their reviews, and welcomed the government’s commitment to give the regulator new directions powers that could speed up remediation programs in future.
‘These reviews have been unreasonably delayed,” she said.
“ASIC acknowledges that they are large-scale reviews – they relate to systemic failures over long periods with reviews going back six to 10 years and cover 36 licensees from the six institutions that currently authorise more than 7000 advisers.
“However, we believe the institutions have failed to sufficiently prioritise and resource their reviews, particularly as ASIC advised them to commence the reviews in mid-2015 or early 2016.”
ASIC said some of the delays had been caused by poor record-keeping within the banks, meaning that often the banks were unable to find or access customer files for review.
These reviews have been unreasonably delayed.
Danielle Press, ASIC Commissioner
Some of the other banks’ payouts had been delayed because ASIC had rejected the methodology they put forward to identify and repay customers as it felt it would deliver an unsatisfactory outcome for consumers. This included at least one bank, which sources said was NAB, pushing to allow its clients to “opt in” to a compensation program rather than refunding the fees.
The legalistic approach taken by the banks to define what a service was and also to determine whether a service was delivered has also slowed down remediation to customers, ASIC said.