Commonwealth Bank CEO Ian Narev has apologized to the customers that received poor advice that caused financial hardship to its customers. It has been revealed that the Commonwealth Bank’s financial planners had put their clients’ money in to high risk investments without their permission and lost them hundreds of millions of dollars. The Senate inquiry found that the victims had lost millions in retirement savings though the alleged dodgy bank practices by some of the advisors between 2003 and 2012. The CBA has also been forced to admit that they still employee nine of the financial advisors implicated in the scandal.
The Commonwealth Bank CEO has stated that they are launching a program to compensate those that were affected by the fraud. The new CBA program announced will allow customers to call a dedicated number and request an assessment of the advice they had received, and if they were not satisfied with the response, then there will be an independent panel set up to further asses. At this stage, it is believed that $52 million has been paid out to victims so far.
The victims of the fraud are not satisfied with the CBA’s response and would like further action taken, calling for a Royal Commission, which is also what the senate has recommended. Consumer group Choice has questioned the sincerity of the apology, with Choice chief executive Alan Kirkland stating, ‘If the Commonwealth Bank was truly sorry, they would not have lobbied to remove essential consumer protections for financial advice.’ The Governance of Australia Institute has stated that the apology was, ‘CBA's gesture is too little, too late.’ Others calling the compensation scheme ‘shameful’, with former West Australian senator Mark Bishop stating, ‘I think it is shameful. The (CBA) statement is full of empty words and high sounding ideals, but there is nothing meaningful on the table that wasn’t already there.’ Plaintiff lawyers Slater and Gordon are looking at details and have not ruled out a class action.
What are your thoughts on this? Has this revelation changed your opinion of the Commonwealth Bank? Would this lead you to close an account with them?