(Reuters) – A former unit of Australia’s no. 1 lender Commonwealth Bank pleaded guilty to criminal charges for incorrect disclosure statements and deducting fees from deceased superannuation members, the country’s securities regulator said.
The Australian Securities and Investments Commission (ASIC) said on Wednesday 18 charges were filed in Melbourne County Court and are listed for sentencing on June 1, with each offence carrying a maximum penalty of A$180,000 ($128,484.00).
The unit, Avanteos Investments, was a part of wealth manager Colonial First State, in which CBA divested its majority shareholding last year.
ASIC said between Jan 6, 2016, and May 1, 2018, Avanteos issued defective disclosure statements for superannuation products, an organisational pension program in Australia, where it failed to tell the fund members they would be charged adviser service fees after their death.
As a result, 499 deceased members with funds in these superannuation products were charged almost A$700,000 in fees by Avanteos.
The company, which self-reported the issue to the regulating body in 2018, has since remediated all affected customers, ASIC, CBA and Avanteos said in separate statements.
Investment platform operator Avanteos came under the scanner during an investigation into the “fees for no service” conduct as part of the broader Royal Commission into the country’s financial sector in 2018.
The inquiry unearthed widespread shortcomings across the industry, with charging the dead among the most common revelations. Westpac Banking Corp admitted to civil penalty proceedings related to that charge just last week.
($1 = 1.4010 Australian dollars)
(Reporting by Anushka Trivedi in Bengaluru; Editing by Devika Syamnath)
