Banking royal commission: Commonwealth Bank agrees it’s a rip-off ‘gold medallist’

An executive admits Commonwealth Bank is a “gold medallist” in charging customers for services they don’t receive.

A Commonwealth Bank executive has admitted the country’s biggest bank is the “gold medallist” when it comes to ripping off financial advice customers by charging them for services they do not receive.

Linda Elkins, the executive general manager of CBA division Colonial First State, has been giving evidence at the financial services royal commission today.

The commission has heard that between 2007 and 2015, CBA and its financial planning subsidiaries failed to provide annual reviews to more than 30,000 customers.

It has paid $118 million in refunds to customers who paid money for services they never received.

“You’d be the gold medallist if ASIC was handing out medals for fee for no service,” counsel assisting the commission, Mark Costello said.

“Yes,” Ms Elkins responded.

Scandals at CBA’s financial planning subsidiaries were among the factors that helped build pressure for a royal commission into the banks, and Ms Elkins acknowledged the lender had breached the Corporations Act.

However, she admitted that despite the breaches Colonial had not considered kicking other CBA subsidiaries off its investment platform.

“No, knowing the action the entity was taking satisfied us we didn’t need to take any further action,” she said.

She said she was focused on the remediation efforts undertaken by the CBA planning groups.

Mr Costello put it to her that it was “inconceivable” that Colonial would kick a fellow bank subsidiary such as Commonwealth Financial Planning off its platform.

“I would have to agree that’s unlikely,” Ms Elkins said.

“I don’t know that it’s inconceivable.”