Can you imagine walking into a hairdresser, paying for your haircut, then walking out before a pair of scissors have come anywhere near your mane?
Or perhaps, pushing your trolley full of groceries to the checkout, scanning and paying for $300 worth of food, and then walking away without your goods?
It sounds ludicrous, paying for goods and services that you haven’t been able to use.
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But this is precisely what has been happening under our banking system for years. Australian customers have been supremely ripped off, and half the time we didn’t even know about it!
Admittedly, I’d only been keeping half an eye on the Royal Commission. There is only so much corruption and mistrust one can process at any given time, and I guess I had already assumed (like most Aussies I suspect), that banks frequently engage in dubious customer behaviour. Why all the fuss now? They’ve been doing it for years…
But now that I’m catching up, I’m reeling. I already distrusted banks, but now my trust levels have plummeted to a new low.
In this day in age, with so much opportunity and scope for compliance, auditing and reputational management, I can’t believe the depths that a company will fall to, all in the pursuit of a crooked dollar.
For instance, I’ll recap AMP’s scenario for you:
1. AMP repeatedly charged customers, including everyday Aussies who earn ordinary incomes, fees for advisory services that were never delivered.
2. They knew about this practice but didn’t stop it, instead choosing to “preference the interest of shareholders over the interest of clients”.
3. They repeatedly lied to the Australian Securities and Investments Commission (ASIC) about this behaviour.
4. Though collectively, financial institutions have repaid more than $200m in fleeced fees to customers, AMP’s contribution to this has been less than $5m.
It’s little wonder that since their scurrilous actions came to light – resulting in around $1 billion being wiped from AMP’s sharemarket value – its CEO has resigned.
And today comes the news that Quinn Emanuel Urquhart & Sullivan (QE) is investigating a class action against AMP. As Damian Scattini, Partner at QE, notes: “Customers were charged for services AMP has admitted they never received, all so executives could make hefty bonuses.”
To be clear, it’s not just AMP that has been caught up in this dodgy web. As far back as 2012, Deloitte warned the CBA that at least $700,000 in ongoing service fees were being charged to customers even though their financial planners had left the business. Other CBA financial planners admitted to charging dead people fees.
It boggles the mind, truly.
If the Financial Services Royal Commission teaches us nothing else, it still teaches us this: Customers will always come second.
And here’s the honest to God truth: the only way you will EVER come on top when dealing with a bank, is to buy shares in it.