Top bank admits charging dead clients for advice

ruby orimba

April 20, 2018 12:54 PM

One adviser continued billing a customer for advice for more than a decade after they died

Australias top bank has admitted to charging fees to clients it knew had died years previously.

The Commonwealth Bank of Australia told a government inquiry that the practice of billing deceased customers for financial advice stretched back years.

In one instance, an adviser at the bank's financial planning business was collecting fees from a client more than a decade after they had died.

Malpractice

The revelations emerged as part of a Royal Commission, or public inquiry, into malpractice in Australia's financial services industry.

During a hearing, Commonwealth Bank's executive general manager Marianne Perkovic admitted that the lender had charged customers fees for financial advice they never received.

A day later, she conceded that Commonwealth Bank advisers had in some cases drawn fees from clients' accounts after they had died.

2004

In one example, an adviser continued billing a customer for advice for more than a decade after they died in 2004.

When Commonwealth Bank became aware of this in 2015, the company recommended "a possible warning to the adviser," according to an internal document read out at Thursday's hearing. The adviser's behavior wasn't reported to Australia's financial watchdog.

The lender said Wednesday that by the end of 2017 it had paid out or offered refunds of 119 million Australian dollars ($93 million) to clients who had been charged for advice they never received.

ruby orimba