CBA accused of ripping off customers and a cover-up

[fourandsixpants]

http://www.heraldsun.com.au/business/cba-accused-of-ripping-off-customers-and-a-coverup/story-fni0d8...

AUSTRALIA’S biggest and most trusted financial institution, the Commonwealth Bank, is accused of ripping off its customers and then quite deliberately trying to cover it up.

Even more incredibly, the employee at the centre of the scandal was actually promoted AFTER it was known by senior staff at the bank what he had done.

Accused? Heck, all this is known and admitted by the CBA itself. The only real questions are what the CBA has done to make good for its appalling institutional behaviour and what should be done, if anything, about the CBA itself.

The Senate committee which reported on Friday — with only one dissenting voice — called for a Royal Commission.

....funny thing is what info you don't get if you do a search on the i/net. .......MMmmmmmnnnn

....Which Bank?

[monman12]

"defending the com bank while attacking the previous govt, what a surprise."
No surprise , also that the relevant  post has  not been read, or understood, because if it had, this comment might have been noticed (understood):

"What does the overall CBA Bank (trading bank) profit have to do with the disgraced CBA financial planning arm? "

I definitely support the CBA banking division as would the many other hundred of thousands of CBA shareholders and most of the superannuation funds. However, I am most certainly critical of  the actions of the financial planning division arm of CBA (see above)

More C&P without research:
"The advisers would also have been forced to tell their former clients how much they are continuing to pay in ongoing fees and commissions."

Corman: "The government is moving to put this absolutely beyond doubt by prescribing that any payment related to the provision of general advice cannot be an upfront or a trailing commission," he said. "At no point has the government sought to re-introduce commissions or conflicted remuneration for financial advisers."

"Opposition Treasury spokesman Chris Bowen.......welcomed Mr Cormann's move to create an explicit ban on commissions."

[fourandsixpants]

Anyone who signed up with a Commonwealth Bank financial planner between 2003 and  2012 will be able to apply for compensation, with claims are to be assessed by a  "specialist Commonwealth Bank team".

Lawyers representing victims of Commonwealth Bank’s financial planning scandal have questioned the bank’s new compensation scheme, saying it fails to pass the independence test.....

Maurice Blackburn principal John Berrill – who settled individual claims  for victims of one of the bank’s banned planners, Don Nguyen – said the scheme was a repeat of the bank’s earlier failed compensation scheme.

‘‘This is a rehashed, slightly better version of what we had before," he  said. "It still puts the CBA in charge of the initial assessment.

 “The only way to have real independence is by making sure the entire process is taken out of the hands of the Commonwealth Bank,” he said
http://www.smh.com.au/business/banking-and-finance/lawyers-question-cbas-new-commonwealth-financial-...
I agree

......the financial 'arm' of The CBA is still part of the CBA....whatever the legs do or the arms do affects the rest of the body.

[fourandsixpants]

CBA has already paid around $52 million in compensation to 1,100 people as a result of scandal, but some reports suggest the number affected may be as high as 12,000.

https://au.news.yahoo.com/thewest/a/24375712/cba-faces-more-compensation-payouts/

....thats a lot of expensive body parts

[freddie*rooster]

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@monman12 wrote:

"bottom line is do your own research......................." Spot on TH. However,  research  is something many are averse to, including here, and I do not consider  C&P,s research

CBA chief executive Mr Narev sent a note to his 50,000-plus employees on Friday.

In his note Mr Narev maintained that “the actions that gave rise to these issues were those of a minority, five or more years ago . . . that said, we need always to be open to the views of our stakeholders”.

Five or more years ago???? the Circus was in town then, with the two rings, a knife throwing act, Caucus Clowns, and Poor Me and Rudd were  too busy "performing" to oversee those not wise enough (or greedy) to organise their own finances. Myself I am a devout fan of CBA because:

That is just the share price, the dividends (FF) are very good also.

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I'm not a fan, they offer the lowest Term Investment interest rate of all the Banks and Building Societies they are prone to simple error's when dealing with their call centre staff, they make me want to cry.

[monman12]

FR: "I'm not a fan, they offer the lowest Term Investment interest rate of all the Banks and Building Societies......"

So change your bank  after  researching  what they all have to offer,  and use them to your advantage.

I have shares in all the major banks (CBA favourite), use ANZ for daily/domestic transactions, have dividends/share stuff paid into, and out of  BankWest (CBA)  and have my SMSF cash account and personal cash reserves in UBank (NAB)  earning $4.01%. with a permanent additional bonus interest rate.

I tried a CBA domestic account a few years ago, but was not impressed with them!

nɥºɾ

[freddie*rooster]

Monman I have done just that, moved my Mother's 2 x large investments to a Financial Institution offering a much better interest rate.

[cherples]

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@freddie*rooster wrote:

Monman I have done just that, moved my Mother's 2 x large investments to a Financial Institution offering a much better interest rate.

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Don't mistake it for concern.  It's all about talking down at people, preferably the female ones.

[fourandsixpants]

Commonwealth Bank: a case study in failure

...."In years to come, business schools will study the CBA financial planning story  as a case study of how not to handle a scandal, of how a fabulously wealthy and important corporation can suffer such a monumental attack of hubris over the  damage that a gross failure of governance principles can do to a bank, and what  a waste of money it is to pay people (CBA top execs) many millions of dollars and expect them to be able to operate without close supervision and constant challenging......

....What’s $52 million compensation for 1100 victims of dishonesty when a board throws that sort of money around on a couple of executives?

......It has been an unbelievably amateurish performance. As an exercise in crisis management, it is a definite worry, a reason to question the basic competence of  those at the top....."

http://www.smh.com.au/business/comment-and-analysis/commonwealth-bank-a-case-study-in-failure-201407...

I don't have money 'spare' to invest nor play money as some others seem to have. I am just expressing my absolute disgust at my bank for treating those that have trusted my/their bank and been ripped off, treated with complete disdain & arrogance, ignored and kicked around in the dirt.

I am ashamed of the CBA

[the_great_she_elephant]

Without in any way denying the need to compensate generously all those caught up in what can onl be described as amassive  confidence trick, has anyone considered where the money is really going to  come from to pay the compensation? Given that the bank's first loyalty will always be to its shareholders (and profit margins) I suspect the people who will end up paying for CBA's sins will largely be existing borrowers with contracts they are unable to get out of without incurring massive penalties.

[monman12]

TGSE: "I suspect the people who will end up paying for CBA's sins will largely be existing borrowers with contracts they are unable to get out of without incurring massive penalties."

I disagree, why would borrowers (trading bank) be liable? the borrowers  and customers will be effectively isolated firstly because of  professional indemnity insurance:

In its submission to the PJC Inquiry, ASIC referred to a hardening of the market for financial advisers. ASIC indicated that, in spite of that hardening, its inquiries indicated that the professional indemnity insurance market was still functioning appropriately for licensees overall. Financial advisers were able to acquire cover, albeit at increased premiums.

And secondly, any unforeseen charges/compensation payments  would become a deduction against annual profits and result in a lower dividend payment, albeit a percent or two lower (if that).

"I am just expressing my absolute disgust at my bank for treating those that have trusted my/their bank and been ripped off, treated with complete disdain & arrogance, ignored and kicked around in the dirt."

That is codswallo (a secret conspiracy perhaps though) The financial planning arm is different from the banking division and quite rightly should be held responsible for any proved fraud, but not those who over extended leading up to the GFC. (greedy?) :

 Macquarie University corporate governance expert Michael Quilter said the review process may not be the boon customers were hoping for because “A problem is the bank has prefaced this by saying it was the global financial crisis and so it was a period that was difficult for everybody. I wouldn’t expect everyone to be able to ring up and get a very positive response because that was a period when even good advice lost people money,”

"the financial 'arm' of The CBA is still part of the CBA....whatever the legs do or the arms do affects the rest of the body." but not the heart: the banking section, and whilst you complain about CBA domestic banking (have you changed yet?, I bet not) the financial markets and the many hundreds of thousands  of shareholders of the 1,611,928,836 shares on issue , like myself, are content with CBA as a sound financial investment opportunity.

I did not appreciate the CBA retail banking procedures when I was a customer, so I dumped them (try it P007), and am happy using other banks. I also bought some  CBA shares in 1991 @ $7.00 and then automatically re-invested all the dividends into more shares.

nɥºɾ