Are penalties enough to get FFNS payments accelerated?

Only 30% of $5.3 billion of fee-for-no service remediation had been paid customers as at 30 June, 2021, and the corporate regulator believes its “strengthened” guidance will remove the last stumbling blocks from boards to get money back to customers.

Answering questions from during a parliamentary hearing from Labor senator Deborah O’Neill on fee-for-no-service remediation, the Australian Securities and Investments Commission (ASIC) deputy chair, Karen Chester said the regulator was trying to help accelerate some of the remediation programs.

“The biggest stumbling block to the speed has been the systemic under investment in the systems and data by the firms,” Chester said.

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“We've given guidance to ensure that they know what to do in areas where the systems and the data are causing problems, and what the benefit of the doubt assumptions are, how far back to review, and expectations around locating and paying impacted customers.

“We're hoping with that guidance, which we're consulting on at the moment, will provide the confidence and speed that's required for those that fairly amounts to be repaid as quickly as possible.”

O’Neill said the lagging firms needed to be penalised as she was “sick and tired of big companies that have failed to invest in the proper resources in the back office to make sure they had detailed information”.

“Using that as an excuse to continue to block the payment that people have a right to expect and deserve, frankly, years ago now. Now that in my view, there should be a penalty.”

Chester said there were penalties under the Corporations Act’s section 912a and that the penalties went to consolidated revenue. She said the firms that had been penalised were “now on notice” and were not doing business in a way that was not efficient, honest, and fair.

“While these continues, even if penalties are raised, that gives more money to the government. For the people who were ripped off, they should have already got their money long ago and they are not getting any additional payment by this delay,” O’Neill said.

“The Government's got a business model where they're making money out of this being delayed. Now, I don't think they would have concocted it that way – I hate to think that they did.

“But the reality is, the longer this goes on the more money goes to the Government and the more people are going to die waiting for it. That is not a good system designed from my point of view.”

Chester noted that the deadlines to pay remediation were set by the boards of the entities and that the regulator hoped with its new guidance it would remove any of the last stumbling blocks in confidence and speed so the boards could get money back to consumers.

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ASIC are a sad sick corrupted joke.
$5,300,000,000 stolen from customers Investment & Super accounts over a 10 year period. $5.3 $$$$$$$BILLION STOLEN.
And the $$$$Millions on a RC.
And not 1 single Big Bank & AMP executive, manager, AFSL RM, CEO or Board Member is charged, personally fined, banned, named & shamed or jailed.
And ASIC who knew about massive FFNS problems for 10 years & did nothing about it until post RC, yep no one held accountable.
A lowly Adviser makes a spelling mistake on a stupid 90 page SoA, they are hung out to death, publicly executed & personally financially destroyed, jailed, etc.
Yet the Big Insto’s & ASIC it self, no one is ever held to account. THAT IS TGE PROBLEM ASIC.
What a pathetic, corrupt, misguided and deluded system we have.

I agree with your sentiment about ASIC's bias and incompetence, but cannot agree that $5.3B has been stolen. Much of these so called "remediation" payments are refunds for services that were actually provided. Customers willingly and knowingly paid the fees, received the services, and don't understand why they are getting money back.

I agree... and the fact that no record can be found for that service provision DOESN'T mean it didn't happen.

....then again, bad record keeping? 6 years' imprisonment. :P

Well said Colin, sadly we are only expendable pawn advisers in this game of chess.

I imagine that figure would more than triple if ASIC were not so corrupt and actually investigated the ISA/union industry super fund fiasco of charging all members fees for advice regardless of whether they receive any or not.

Agreed, the Industry Super Hidden Commissions for No Service rort is a huge scam $$$$$.
Only problem is it’s fully ASIC approved.
How Industry Super can beat the crap out of Advisers and Commissions for 20 years and then end up being the biggest beneficiary of Hidden Commissions for Advice mostly not provided is truely astounding.
Chance of ASIC closing this = NIL
Chance of ASIC pushing & expanding this rort by Intra Fund sales on all Advice = Guaranteed.

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