Millions of Australian banking customers have been offered a huge payout from the country’s big banks, according to new data from the corporate regulator.
New data from the Australian Securities and Investments Commission found the six biggest banks had significantly increased compensation paid out or offered to customers, reaching $3.25b as of last year.
A staggering $1.3b was paid to customers between July and December last year.
The financial watchdog said the compensation would be paid to customers who had “suffered loss or detriment because of fees-for-no-service misconduct or non-compliant advice”.
Impacted customers were either charged an annual fee for financial advice they never received or, in some cases, for financial advice they did receive but which was not compliant.
The two major ASIC reviews resulted in AMP, ANZ, CBA, Macquarie, NAB and Westpac undertaking review and remediations programs to compensate customers.
National Australia Bank offered the largest compensation of all the major banks txjmtzywo its customers.
AMP, ANZ, Commonwealth Bank, NAB and Westpac were all pinged in the wake of two ASIC reviews into non-compliant financial advice and fees for no service.
One review found AMP, ANZ, CBA, Westpac and NAB improperly identified and dealt with non-compliant advice by financial advisers between 2009 and 2015.
Another review found AMP, ANZ, CBA and NAB, as well as some of their product issuers, had charged customers fees for services they never received.
According to ASIC, more than 1.3 million Australians are affected by the bank failures and will be covered in the remediation schemes.
NAB saw its compensation levels for fees for no service more than double to $1.1m by December, while Westpac’s rose to $894m.
In addition to its payouts for non complaint advice, NAB has disclosed total remediation costs of at least $1.21bn, expected to be completed by October.
That compared to Westpac’s total payouts of around $956.39m, set to wrap up next month.
Financial services group AMP has offered customers $649m in remediation payments.
CBA is up for $218.5m in payments to customers for fees for no service and non compliant advice from its financial planning businesses.
Payments to CBA customers are set to be the slowest of all the big banks, only expected to conclude in December.
ANZ disclosed there was around $169m in compensation paid, while Macquarie clocked up $4.6m.
