Australia’s big four banks and AMP have forked out or offered more than $222 million in compensation to customers charged for advice they didn’t receive.
Total compensation could soar to $850 million across the banking sector if all future payments are made to customers.
Commonwealth Bank, NAB, ANZ, Westpac and AMP made up $222.3 million of the $259.6 million paid or offered to customers so far.
Figures released by the Australian Securities and Investments Commission on Tuesday show the Commonwealth accounted for $118 million and is due to pay another $25 million.
ASIC says the balance is made up by other financial institutions, including Bendigo Financial Planning Ltd, Police Financial Services Ltd, State Super and Yellow Brick Road.
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But it says five other institutions have allowed for significant future payment for imposing fees for no service..
“If all of these provisions are paid in full, FFNS remediation may exceed $850m,” ASIC said in a statement.
ASIC released the figures after Treasurer Scott Morrison earmarked $70 million for corporate cops to be embedded in the under-fire industry.
The initiative will see staff from ASIC on the beat in local bank branches and head offices, with the measure funded out of fees the banks pay for regulation.
The corporate watchdog will have regulatory enforcement staff working from head office to branch level to prevent breaches and crack down on those who do the wrong thing.
Mr Morrison said the scheme, part of a suite of initiatives pushed by new ASIC chairman James Shipton, was about putting the regulator in the community they’re regulating.
“The best cops are the ones that prevent crime from happening in the first place, not just dealing with it once it’s occurred,” he said.
He says he’s open minded on whether the initiative could be expanded to other sectors.
The new powers come after the financial services royal commission uncovered widespread issues with compliance and governance.
Mr Shipton will have oversight of the process, including how many regulatory officers are appointed and what their focus will be.
Mr Morrison said the banks and financial services companies were on board with the changes.
Labor’s financial services spokeswoman Clare O’Neil said she hoped the initiative would improve ASIC’s enforcement capabilities.
But she said for Australians whose stories of being ripped off had been heard by the royal commission the announcement was too late.