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Australia corporate watchdog orders CBA unit to stop taking fees
[SYDNEY] Australia's corporate watchdog has told Commonwealth Financial Planning, a unit of Commonwealth Bank of Australia, to stop charging service fees to its customers because it has failed to comply with a court order to fix wrongly levied fees.
The Australian Securities and Investment Commission said on Monday that CFPL also agreed not to enter into any new service arrangements with customers.
The orders come as Australia's financial sector braces for the final report from a powerful inquiry that exposed systemic wrongdoing across the industry last year, likely leading to sweeping changes.
Commonwealth Bank, which came under fire at the inquiry over its fee structure and for charging customers fees for financial advice they never received, is seen as particularly exposed to a regulatory crackdown owing to the size of its retail business.
ASIC said the bank's financial planning arm failed to respond adequately to its concerns about its fees for no service, triggering the restrictions.
The bank had no immediate comment when contacted by Reuters.
The "Big Four" banks - CBA, Westpac Banking Corp, Australia and New Zealand Banking Group and National Australia Bank - plus AMP have already committed to pay more than A$2 billion (S$1.95 billion) to wronged customers.
The new requirements would continue until CFPL is able to satisfy ASIC that all the outstanding issues have been remedied.
"ASIC has also been informed by CFPL that it is now in the process of transitioning its ongoing service model to one whereby customers are only charged fees after the relevant services have been provided," the statement said. "ASIC will monitor CFPL's transition to the new model."
Shares in CBA fell 0.5 per cent in early trade, while the broader market opened flat.