The senior management of Australia’s leading Banks went before the Australian Senate on Tuesday to answer questions regarding widespread fraud in their Superannuation / Wealth Management departments. Last year alone almost $80 million was paid to victims of the banks frauds. What was obvious at the senate hearing is the contempt the banks still have for Australian Laws, the Senate and their customers.
The widespread frauds by the banks staff have been in the media for years yet the CEOs showed up at the Senate hearing admitting they needed to do a lot more to stop the frauds and pay compensation to customers.
The worst offender at this stage would have to be the Commonwealth Bank of Australia, who are run by dodgy CEO Ian Narev, and which paid back $52 million to more than 1000 customers last year. The CBA is also funding the defamation proceedings of a staff member against a whistleblower which is extremely dirty pool to say the least. (Click here to read more)
Ian Narev told the senate hearing that the CBA’s new compensation scheme which the bank set up 6 months ago has had over 20,000 queries. Of that almost 5000 requests were made for their accounts to be reviewed for possible fraud and 207 offers were made for compensation but “We’ve only paid to about three customers so far”. (Click here to read more)
Yep, that is exactly what Ian Narev told the senate and let’s repeat it “We’ve only paid to about three customers so far”. What makes matters worse is the fact that the CBA has 400 staff working on their new compensation scheme which means a lot of people are not doing their job.
400 staff divided by 3 paid customers equals a hell of a lot of lazy staff or a compensation scheme deliberately run as nothing more than a joke
For Narev to show up to the Senate Inquiry and actually say what he did shows how much contempt he has for Australian Laws, the Senate and his customers. Some of his answers were clearly lies. The other CEOs of the other banks were not much better than (but quite as bad as) Narev.
Commonwealth Bank stalking and harassing whistleblower Michael Fraser
The Commonwealth Bank are paying the legal fees of their staff member and senior executive Brendon French to sue CBA fraud whistleblower Michael Fraser. The claim is very dodgy given the amount of fraud and theft that goes on at the bank. The approval for the bank paying the legal fees would have to of come from CEO Ian Narev and possibly the bank’s board of directors. (Click here to read more) The matter has been sent to mediation by Justice Lucy McCallum to attempt resolution. If the mediation fails a trial would be held later this year or sometime next year.
The banker’s scandalous and obvious plan on compensation
The strategy by the banks is very obvious and an old routine. Drag out the compensation payment scheme as long as possible so people get tired or desperate waiting for their money. That way the customer accepts a reduced offer from the bank and the bank saves millions. The banks would also be aware that some customers will die before they get compensation so they will have to pay them nothing.
The bank’s delaying tactics on compensation is not accidental and it is clearly coordinated between them to some degree. Maybe the ACCC should investigate for breaches of the Trade Practices Act
Why Australian Banks lie and deceive the customers
The main reason banks lie and deceive is because they can as no one stops them and their competitors do. The banks think if they stop their sales staff from pushing and overstepping the boundaries of selling then they will lose customers to the other banks. So for a long time they have deliberately turned a blind eye to the frauds. The vast majority of the time they have also deliberately helped cover-up the frauds.
Weak government and regulatory bodies
Regulatory bodies like the Australian Securities and Investment Commission (ASIC) have been a total failure on this issue and should be closed down and rebuilt. The federal government should have set up a Royal Commission last year into the banks and the Labor Party also should have done a lot more when they were last in power but they are making the right noises now.
If the federal government do not move to set up a Royal Commission in the near future then they leave the door open for the Labor Party to make that one of their promises at the next federal election which is next year. That will be a big vote winner as every working adult has superannuation and it will be an election issue. Prime Minister Tony Abbott needs to wake up to that fast otherwise the government will lose a lot of votes.
The battle with the banks is a long way from finished but they are on the back foot and it is battle that needs to be won because it affects every Australian’s future.
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