Thousands of Australians ripped off by their banks are still waiting to be reimbursed, and pressure is mounting on ASIC ensure the job is done.
The so-called ‘tough cop on the beat’ faced an intense grilling from a senate parliamentary joint committee over billions of dollars still owed to thousands of customers for misconduct identified by the banking royal commission.
Labor senator Deborah O’Neill said it was “outrageous” customers are being forced to wait to have their money reimbursed when the banks have already accepted the blame and set the cash aside.
“A lot of the people who speak to me, a lot of the people who the Labor party represent, are people who have had investments not being managed properly by banks that they trusted,” she said.
“Their financial literacy is based on their belief that the banks are doing the right thing. They have been caught up in the banks doing the wrong thing.
They are waiting now, after the banks have accepted they’ve done the wrong thing, to be paid their fair share.
Ms O’Neill pressed ASIC to do more, and called on the banks “to get over the culture of restriction and containment and deliver the funds to the people who deserve them”.
James Shipton, chair of the regulator, said Ms O'Neill's "call to action [was] an appropriate one" but added that ASIC has limited ability to speed the process up.
Instead, Mr Shipton said customers having difficulty with their bank should contact the Australian Financial Complaints Authority (AFCA).
Reforms could speed up the process
Responding to Ms O'Neill's questions, ASIC deputy chair Karen Chester said soon-to-be-introduced directions powers will give the regulator more bite.
These powers will enable ASIC to effectively give orders to banks and other financial institutions that have engaged in misconduct.
"[That] means if we’re not happy with the pace at which remediation is taking place or in how it’s being conducted, then we now have directions powers to step in," Ms Chester said.
Banks still to pay billions
Just how much the banks owe to customers is still up in the air, but ASIC expects the total cost to the banks to be around $10 billion.
That sum however includes the cost of actually facilitating the remediation program as well as the money owed to customers.
But even accounting for the cost of returning customers' money, the amount that has so far been refunded is relatively low.
The big four banks – ANZ, Commonwealth Bank, NAB and Westpac – have collectively only returned just over $1 billion.
Commonwealth Bank is responsible for the lion's share of that money, handing back $630 million to wronged customers.
"Remediation continues to be a big focus for us, making sure that we are refunding our customers as quickly as possible," a spokesperson for the bank told The New Daily.
"We have a large team very focused on making sure we complete that remediation.”
Westpac and NAB have respectively refunded $350 million and $276 million to affected customers.
ANZ did not respond to The New Daily's request for data, but the business' 2019 annual report showed $100 million was returned to customer's pockets in the past financial year.