Here Are The Latest Shocking Findings Of The Banks Royal Commission
Some banks may face criminal charges.
You've probably been hearing a lot about the royal commission into the banking and financial industry. Maybe you've been a bit worried about your own bank accounts, investments or superannuation accounts, after hearing about people being ripped off, people being charged for services they didn't want or weren't provided, or even about big companies taking money from dead people.
On Friday, the royal commission recommended charges against the Commonwealth and National Australia Bank over how they treated superannuation customers. CBA admitted to more than 13,000 breaches of law, while the market regulators -- the agencies which are meant to look after customers and make sure institutions aren't acting badly -- were slammed as ineffective and lacking.
So what does this all mean for you? Should you be worried? Is it time to take all your money out of the bank and stash it under your mattress? Here's what you need to know.
What is the banking royal commission?
The commission -- officially known as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, or the Hayne Royal Commission -- was announced in November 2017 by then-Prime Minister Malcolm Turnbull and then-treasurer Scott Morrison. It came after repeated instances of banks and financial providers ripping off customers.
Labor, the Greens and independent MPs had been long pushing for a royal commission, a high-level federal investigation with strong powers to call witnesses, demand documents and conduct investigations. The government had also long refused, but finally relented after the ANZ, Commonwealth, NAB and Westpac banks actually asked for a royal commission in hopes such an enquiry would be" in the national interest for the political uncertainty to end".
The commission was to investigate misconduct in the industry, and share its final report by February 1. Hearings kicked off in February 2018, and in the last few months, many damning allegations and findings have been aired.
What have been the key findings of the royal commission?
Lots! The Commonwealth Bank and other service providers were sprung charging advice fees to the estates of dead superannuation customers; NAB's superannuation trustees MLC and NULIS, as well as AMP, charged customers fees despite providing no services; some customers were provided with terrible financial advice which cost some of them up to half a million dollars; and multiple institutions failed to look after customers, forged signatures, and failed to take action against advisors who provided bad information.
The findings of the commission have had huge consequences, with executives and big wigs from several companies stepping down after their misdoing was revealed.
What are the consequences for the faults?
Well this is where it gets interesting, and where Friday's news comes in. You might have missed it during all the leadership spill drama, but NAB and CBA may face criminal charges for how they behaved.
"Assessed as a whole, it is submitted that this behaviour indicates a disregard on the part of the NAB Group for members of the relevant superannuation funds, for regulators and for the law," counsel assisting the commission said of NAB charging customers for services which were not provided.
The Australian Securities and Investments Commission is already investigating "suspected offending" by the NAB group over fees for no service.
This means several institutions may face criminal charges for offences including charging for services not provided, for not moving customers to the most appropriate superannuation accounts, and for tardy reporting of breaches.
What does this mean for my money?
Well, it's probably as good a reminder as any to check out the type of superannuation and bank accounts you use. This should not be taken as official financial advice from an expert, but take a look at the fine print in your agreements to see what kind of fees you are being charged, and whether the services you are being charged for are relevant to you.
Banks and financial service providers are promising to clean up their act and regain the trust of customers, so you may receive emails or letters from the institutions you do business with. Make sure to read them carefully and see what it means for your money.
There have been big impacts on the banks themselves, with billions wiped off their share prices over recent months after huge damage to their reputations.
What happens next?
The royal commission has been running for a few months now and there is still quite some time to go. We almost surely haven't seen the last of the shocking bombshell findings. An interim report is due in September and the official final report of the commission is due early 2019, so be prepared to be reading a lot more about this in coming months, including whether your bank or provider might face charges.