SYDNEY: National Australia Bank Ltd. and Commonwealth Bank of Australia may face criminal charges over multiple breaches of the law in their treatment of pension customers, an inquiry into misconduct in the financial industry has been told.
The two lenders faced particular criticism in a 200-page closing statement by counsel assisting the inquiry Michael Hodge following 10 days of evidence on the superannuation industry. AMP Ltd., Suncorp Group Ltd., IOOF Holdings Ltd. and Australia & New Zealand Banking Group Ltd. were also cited for potential legal breaches.
National Australia’s wealth and pensions units have been under fire after revelations they charged customers fees when no services were provided and then downplayed the extent of the problems to the corporate regulator.
“No reasonable person” would believe that the lender’s communications with the Australian Securities & Investments Commission regarding the matter were open and transparent, Hodge said, adding that its communications show “both a disrespect for the role of the regulator and a disregard for the gravity of the events in question.”
Commonwealth Bank was rapped by the inquiry over its failure to move more than 13,000 pension customers over to low-fee accounts by a legal deadline and for charging fees to dead customers. Hodge listed a swath of potential breaches of the Corporation’s Act, including a failure to provide honest and fair services and to prioritize the interest of members over advisers.
The findings are the latest headache for Australia’s big lenders as the ongoing inquiry exposes a litany of failings across the industry, leading to calls for tougher regulation.
The financial institutions have a week to respond to Hodge’s latest submission.