Commonwealth Bank lists some of the ways it has failed customers

THE nation’s biggest bank has released a statement detailing how it has let customers down — while admitting it is “not an exhaustive list”.

Commonwealth Bank has vowed to make things right for the customers it let down.

THE nation’s biggest bank has released a statement detailing how it has let customers down — while admitting it is “not an exhaustive list”.

Commonwealth Bank has vowed to make things right for the thousands of Australians left out of pocket by a raft of stuff-ups, from the $10 million worth of “junk insurance” it will repay to customers to the underpayment of superannuation to employees.

And the bank has today added a new item to the list, confirming it told ASIC it may have continued to levy insurance premiums against customers after they had died.

CBA is investigating whether it owes money to the estates of deceased people who took out insurance to help pay off credit card balances.

The bank said it had notified the regulator about “an issue affecting some insurance products” where confirmation of the cancellation of an existing insurance policy may not have been sent to the deceased estate.

The revelation comes after Reserve Bank governor Philip Rowe and ASIC chairman Rod Medcraft called for greater transparency from the bank, which has been mired in a string of controversies, including alleged breaches of anti-money laundering and counter-terrorism financing laws.

Ian Narev will retire as CBA chief executive in 2017. Picture: Saeed Khan

A bank spokesperson said the insurance was the CreditCard Plus policy, which according to CBA’s website is to help holders pay off credit card balances if they lose their job, become ill or die.

In its statement, CBA said the number of affected customers should be less than 1,000 and that accounts dating back to the year 2000 were being checked.

The problem was an administrative one identified during an informal review, a spokesman said.

“It may mean there may not have been a benefit paid to an estate,” he said.

“If we find we should have paid a benefit to a deceased estate we will make that right, including interest.”

CBA chief executive Ian Narev yesterday announced plans to stand down from the top job in 2018, after taking a 55 per cent pay cut in the wake of the bank’s a tumultuous year, which has cast a shadow on its record annual profits.

The bank listed a number of shortcomings it was seeking to remedy in its statement released on Monday, including:

• A review of superannuation payable to all employees dating back eight years, covering 36,000 current and former workers. The total amounts are yet to be determined, but the first $16.3 million tranche of repayments is expected to made soon, with an average refund per employee of approximately $463 plus interest.

• Charges on disputed card transactions. The bank noted when refunding disputed transactions on customers’ cards, while the transaction itself was correctly reversed, certain charges associated with the disputed transactions were not always correctly adjusted. After reviewing 4.5 million transactions dating back to 2009, refunds totalling $5 million will be made to about 335,000 customers.

• Refunding Credit Card Plus insurance customers who purchased coverage and “may not have met the employment criteria, meaning they may not, if the need arose, have been able to receive certain benefits under the policy.” In a deal struck with ASIC announced on Monday, CBA will soon start refunding about $10 million to 65,000 customers.

• Refunding Home Loan Protection insurance customers who had been charged an incorrect premium amount, or had were charged premiums before the home loan was drawn down. Thus far, 9,600 customers have been identified and $586,000 has been repaid.

• The bank says it in ongoing discussions with ASIC over the regulator’s concern some Essential Super customers may have been given personal advice rather than general advice during the sale of the product.

• Deceased estates: “Today, ASIC was notified about an issue affecting some insurance products, where for a number of accounts, a confirmation of the cancellation of an existing insurance policy may not have been sent to the deceased estate,” CBA said in a statement. “We are currently undertaking a detailed investigation back to the year 2000 to confirm the number of affected customers and will contact their estates and remediate if appropriate.”

— With AAP.

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