Customers charged fees but provided with no service by Australian financial institutions could be in line to collectively receive A$850m (£485m, $628m, €545m) in compensation based on the money firms have set aside for future claims.
As of 30 June 2018, consumers have been paid or offered A$259.6m.
The compensation stems from a 2016 report by the Australian Securities and Investments Commission (Asic), called Financial advice: fees for no service.
It described systemic failures of the advice divisions of the largest banks and AMP, as well as some of their product issuers, to ensure that ongoing advice services were provided to customers who paid fees to receive these services.
It also outlined the failure of advisers to provide such services and the failure of product issuers to switch off advice fees for customers who did not have a financial adviser.
Who’s paid what?
The Commonwealth Bank of Australia (CBA) shelled out the most money (A$118m) as of 30 June 2018, followed by ANZ Bank (A$50.8m) and financial advisory business StatePlus (37.2m).
Refunds expected to rise
In addition to the money already paid out, firms have earmarked funds for future payments over the scandal, which was brought sharply back into focus during the Royal Commission into banking, superannuation and financial advice.
In court, it was revealed that at least one individual was charged fees despite having died.
Asic has confirmed that, based on further estimates, remediation “may exceed A$850m”.
AMP announced in July 2018 that it has provisioned an additional A$360m to refund claims.
NAB has identified a further A$65m liability, while Westpac expects to take an additional hit of around A$20m.
StatePlus has provisioned a further A$53m in costs.
Other firms have set aside smaller sums to pay back clients.
