CHOICE membership

Royal Commission into Banking


#141

I wonder how many of the same customers destroy their own bank statements instead of putting them in their insecure wheelie bins.

I remember a few years ago a NAB bank statement from someone down the road blew from the rubbish/recycling truck into our front yard. I continued their wishes by placing it in our recycling bin.

I keep all our hard copies for at least 7 years and have a fire every so often to ensure mine disappear into thin air.

With most bank statements now being electronic, the risks of one own bank statements being ‘lost’ to the dark side of the internet possibly increases.

The CBA issue could be as simple as someone not completing the chain of custody confirming the tapes were not destroyed.

I am also surprised the bank hasn’t moved on from tape based storage to other forms.


#142

What someone does with their records is up to them. When a business who is responsible to carry out due diligence fails to carry that out and then leaves customers who are normally very secure with their data (not all are but some are very security minded) no chance to control it, this is wrong.

This was electronic type storage so even if a person had opted out of paper they still lost control. It could be as simple as not completing a form but the bank and the business can’t even confirm that, it is an unknown and thus why it remains a loss of control over the data.

Tape based storage is still used as it has a very long storage life when stored correctly compared to many other forms of storage. it is cheap per GB at $0.01 cents or less per that GB, and can have good capacity with LTO-8 at 12 TB per tape (12 PB or so per 1.3 sq metres of storage floor space), it uses about 1/15 of the power cost of a HDD, it is normally more securely moveable than other forms of data storage. It is slow to retrieve from compared to some other means but at around a read speed of 1 TB/hr it isn’t terrible when used as the last option of retrieval. All in all it is a pretty safe (time wise) and reliable form of archival back up media. That’s why banks and many other large businesses have Archival Tapes. Google still use it for archival purposes.


#143

Does this same care of record management extend to all CBA records? The CBA has an obligation to respond individually to deductions for financial planning advice going back to the early 2000’s. Is there also uncertainty around the availability of customer records from the CBA relating to this long past period? If so then any claims may depend solely on the records still held by customers. Most notably those who do not have a bonfire every 7 years!

It is also notable both my parents used (note passed tense) the CBA, had account deductions for FPA, and only saw a planner twice to my knowledge over ten years. The Royal Commission will not short of a change in Federal Politicians hearts ever fairly undo the damage. Hopefully it will see the Parliament act with a conscience and not along party lines to fix the flawed regulations and regulatory bodies that have been with us since the “Howard Years”. These bodies also need to have a 50% make up of the"common people", not just “industry experts”. There is also a need to bring customer balance. Is there any better way?

Most disturbingly I also note that at the beginning of these posts others warned that there might be added costs/losses passed onto customers and shareholders (super funds) as a consequence of the RC.

The paradigm that it is the company that is liable is sorely tested. I’d be happy to see any fines etc directed to the CBA as a corporation suspended. And as much as I accept that it is hard to apply law retrospectively - I’d ask that the senior management and directors should be held accountable under criminal law equivalent to fraud and misconduct in public office, face jail time, fines and lifetime bans on holding similar positions.

It seems unreasonable that consumer law and corporations law into the future should continue to apply lesser penalties on the individuals entrusted with your funds than criminal law applied to a thief in a simple burglary.


#144

Hear hear! There should be similar penalties for individuals who commit fraud on their own behalf and corporate leaders who do it on behalf of their company.

The current approach which usually fines the corporation only encourages the cowboys who are prepared to take risks and to step well over the line in order to fatten their bonuses. After it is all over (under the current system) nobody will be to blame, it will just be an unfortunate accident that they are terribly sorry for and they will grovel for a while to show how serious it is. In some cases the fine is less than the amount defrauded and of course those who made the decision will be shielded as will those who do the shielding.


#145

It costs money to mount a criminal case, and when government is cutting budgets for its investigators that makes it more difficult for them to do their jobs. Criminal cases also require that the government of the day supports your mission, and doesn’t appoint foxes to guard the hen-house. The current head of ASIC hails from Goldman Sachs, and his father was - according to this article - a prominent member of the Liberal Party.

Of course, you also need laws that support your mission and provide you with the powers and range of punishments that your function requires. Laws that let you levy huge fines on institutions don’t punish the institutions, but instead hurt the shareholders. Our regulators need to be able to bar certain people from working in particular industries - and pretty much everyone who has so far appeared at the Royal Commission should probably be on that list for the banking industry.

Of course they do! If the RC could look at the regulators, it would necessarily look very closely at recent government decisions. There is no way the government would survive that kind of probing. Let’s see if the RC lasts long enough for a change of government, and if that in turn results in expanding the ToR.

I don’t know how best to convey my sympathies to you, but… you’re dreaming if you think any of the major parties is going to have the guts to make large businesses at all accountable for their crimes.

This certainly echoes my wishes, but again… how is an ex-politician going to get a cushy job once the public gets sick of them if they’ve made things tough for their future employment prospects?


#146

ASIC have now said they are going to get tough on the Banks and other institutions Wealth arms. How many years does it take to get tough? Why weren’t they tough before and if they are getting tough now then that means they were soft all the time before. The questions keep being asked but the answers never seem to be forthcoming, we only hear what they are going to do now not why they have failed so far. Plus they have just had a funding cut proposed in the Budget so with less money they are going to do more than when they had more money and did less…sounds like a joke doesn’t it…like that nursery ryhme in many ways about the straw, the blunt axe and a hole in a bucket…it just keeps going round and round with no action really going on.

As for the Enforceable Undertakings, well the ABC released a news item about them and the cosy relationship between the Money Businesses and the regulators:

http://www.abc.net.au/news/2018-05-17/banking-royal-commission-casts-doubt-on-enforceable-undertakings/9768164

Is it any wonder AMP don’t want the Banking RC to deal with them and want it to be ASIC as they really enjoy soft touch rather than hard time:

So many of these Boards are filled by family, friends, friends of friends it is hard to see any real change will come unless the Boards of these institutions are washed out, so “clean laundry” (Boards) can be installed (I don’t mean they are dirty but I mean a new set of Boards):


#147

In light of the recent industry misconduct, we’ve put together some advice for lodging a dispute with your bank:


#148

I have just received the Choice email encouraging me to sign a petition on banking reform. The email is titled: “Breaking news: Commbank scandal”

I approve of the sentiment and have signed the petition. However I thought the wording of the email was inaccurate and somewhat purple; not what I expected of a Choice communication.

Commonwealth Bank staff impersonated schoolkids to reap cash rewards

This sounds like they the staff dressed up, imitated or similar. What they actually did was set up fraudulent accounts of a type that are supposed to be available only to (school?) children.

Commonwealth Bank targeting kids’ accounts shows there’s no limit to how low the banks will sink to turn a quick profit.

This statement makes it sound as though children have been specifically targeted or affected by this scam. But child customers will be affected in the same way as any other bank customer–by high fees and low interest rates for example.


#149

They deposited money into Dollarmite accounts that had been opened for real school children so that it looked like it was being saved to in the 30 days of being opened so they could get the targets and thus the bonuses. If the account did not have a school child depositing within that initial 30 days it was not considered active for the purposes of bonuses.


#150

Whilst it won’t impact on customers, I hope that the bank recovered the bonuses paid. This would be an incentive not to do the wrong thing again in the future. I am sure shareholders would think that that would be part of acceptable disciplinary action.


#151

Thanks for the feedback on the wording @jen, I’ll be sure to pass it on.

For those interested, here is a link to our campaign:


#152

Oh dear the poor Banks felt they should be granted easy to deal with rules regarding Small Business Loans so ASIC watered it down for them…Yep ASIC are getting tough on the Banks…NOT!!! How utterly galling!

https://thenewdaily.com.au/money/finance-news/2018/05/21/banks-rejected-changes-to-small-business-lending-rules/

Signed and tweeted the campaign.


#153

… feelings of schadenfreude - not entirely appropriate, as they did it to themselves … :slight_smile: but still …

https://www.accc.gov.au/media-release/criminal-cartel-charges-laid-against-anz


#154

… now the schadenfreude seems so much more appropriate :wink:


#155

They’ll be having quite a party where they are going !!!


#156

It is nice to see the action but it is about 3 year old offences. Obviously they have to gather evidence and get a case together but still 3 years is a long time. The other thing to note it is about shares not about how they have treated the public with their account practices, of which some are obviously criminal and there are a few banks and other financial institutions that via the Banking RC have been shown to use similar treatment of the public.

ACCC, ASIC and APRA don’t have to wait for the Banking RC to report before they take criminal court action against these institutions. I also ask where were APRA and ASIC during these Share trading issues, don’t they have roles in policing these actions? Failure and perhaps collusion by our major Commonwealth arms who have the regulatory responsibility looms large in my mind.


#157

Another day another Regulatory failure by the agencies who should have been watching banks. In 2016 Suncorp were asked by the Regulator to check their contracts didn’t breach new laws…they haven’t done it yet. Who is to blame, well Suncorp but the Regulator failed by not ensuring it had been done.

And more disappointing news from the Royal Commission:


#158

Yeah, I figured it would all flush down to the same treatment plant for incurable bankers and executives :slight_smile: It could be a fresh topic but …

I also figured it was about corporate ethics - a contradiction in terms I know, but its the same ethics in play on every external interface with banks, whether its shares, tax, customers … :slight_smile: and it was so good to see …


#159

Grahroll: I had some limited experience with Commonwealth Public Service bodies for quite a few years – unfortunately. My belief from those experiences was that most middle-managers had no university qualifications, and therefore no theoretical underpinnings for the work which they were supposed to be doing. Instead, it was just business as usual, as it had developed over decades in the job. And whenever anyone came in from outside who had such qualilfications, they were pilloried and sidelined by those same people. There were exceptions, and those exceptions were wonderful people; but sadly there were so few of them.

Another issue which I discerned was calculated ‘capture’ of the regulatory body, by those who should have been its targets. This meant that if any hard enforcement looked like being commenced by lower-level staff; it was immediately shut down by higher-level staff to whom complaints were made by those about to have enforcement action taken against them.

The academic body at ANU, called RegNet, does wonderful work on so many of the relevant issues; but getting the traction within the bureaucracies on a large scale seemed to me to be almost impossible.


#160

More good news for CBA …

… in ‘unrelated news’, CBA have changed some terms and conditions :wink: