Regulator zeroes in on misbehaving Australian banks issuing pension products

CBA and ANZ have agreed to pay a total $1.85m in community payments.

Reuters reports that corporate regulator Australian Securities and Investments Commission (ASIC) called out embattled lenders Commonwealth Bank of Australia (CBA) and Australia and New Zealand Banking Group (ANZ) after the banks sold complex pension products without proper advice to customers. 

ASIC said that the two banks sold the products during so-called “financial health checks” without proper licensing and training as branch staff are authorised to provide only general information and not personal advice.

Also read: Australian watchdog seeks staff integration into misbehaving banks to intensify oversight

The two banks agreed to the regulator's enforcement action and would pay a total $1.85m (A$2.5m) in community payments, according to the regulator. CBA stopped selling the products at its branches in October whilst ANZ will stop discussing retirement products on conversations with customers about their general banking needs by August.

"We acknowledge ASIC's concerns that customers may have regarded this as personal advice, and have agreed to change our distribution process," said ANZ group executive for wealth, Alexis George.

The move comes as the country’s largest lenders face their worst crisis in years after a probe revealed rampant corporate wrongdoing at the banks, prompting bank customer satisfaction to plunge to six year low and foreign lenders scrambling for spoils. 

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