Some reputable banks in Australia have allegedly been charging fees for nonexistent services even from deceased customers. These financial institutions have been accused of giving misleading investment advice and breaking customers’ trust. As such, they have been levied with a fine to compensate their clients, reports a media outlet on February 7.
The Royal Commission Investigates Banks in Australia
Based on reports, the Royal Commission spent a year investigating banks in the area for malpractice. As part of their national inquiry, 10,000 public submissions were reviewed, and over 130 witnesses were interviewed in public hearings. Among these witnesses were those who had been exploited by banks and made bankrupt.
In line with that, the Royal Commission after its investigation discovered that some banks in Australia have been charging customers for services that were not rendered. The same applies to customers who are deceased. Some of the banks accused of this misconduct are Westpac, CBA (Commonwealth Bank of Australia), NAB, and ANZ.
Further reports reveal that they had collectively imposed fees on their client amounting to A$178 million (US$126 million), and for financial advice which was never provided. Besides, those who gave advice still led to losses worth millions of dollars on the part of the customers.
Australian Government Endorses 76 Recommendations
Therefore, the government has endorsed 76 recommendations which were proposed by Commissioner Kenneth Hayne to curb this menace. That being the case, some banks may face criminal charges for these acts. Financial institutions will also have to compensate their clients with A$850 million (US$603 million).
Josh Frydenberg, Australia’s Treasurer, stated that people had suffered immensely from the malpractice of financial institutions. He has, therefore, suggested that the government take swift actions in implementing the recommended reforms.
The Treasurer also said:
It’s a scathing assessment of conduct driven by greed and behaviour that was in breach of existing law and fell well below community expectations…There have been broken businesses, and the emotional stress and personal pain has broken lives.
Holding Funds in Cryptocurrencies, a Better Option to Fiat
On considering the operations of these banks, holding funds in cryptocurrencies like stablecoins could be a better alternative. Here, the user’s funds are not centrally controlled and as such, fraudulent acts cannot be carried out. However, there is still the downside to holding these assets given their unstable prices and the vulnerability of some wallets to attack.
Asides that, the media also noted that ripping off customers is not the only misconduct performed by banks because they are also helping criminals to launder money. For instance, a study by a group of journalists from 12 countries revealed that some banks in Europe allegedly helped people to steal money from the government through tax reclaims.