Commonwealth Bank’s Colonial First State has been hit with its second class action in two days, this time over allegations more than 500,000 superannuation members were gouged over fees.
Slater and Gordon has filed class action proceedings in Victoria’s Federal Court alleging that Colonial failed to act in the best interests of FirstChoice Super members and acted unconscionably by charging higher fees to pay so-called grandfathered commissions where no ongoing services were required.
The class action stems from revelations at the financial services royal commission that since 2013, Colonial paid advisers or their licensees more than $400 million in commissions funded by higher fees to superannuation members.
Many of the advisers worked for other parts of Commonwealth Bank, which profited from retaining the commissions.
“The Hayne Report found there was no justification for continuing to pay commissions to financial advisers,” Slater and Gordon Special Counsel Nathan Rapoport said.
“Paying these commissions – and as a result charging members higher fees – ripped hundreds of millions of dollars out of members’ retirement savings to profit the financial advisers or the licensees they worked for who were not required to provide any services in exchange.”
Rival law firm Maurice Blackburn on Thursday filed proceedings in the same court alleging that Colonial failed to move $3.2 billion of members’ money into a lower-cost, higher-performing MySuper product in a timely way, acting against the best interest of members and contravening superannuation law.
But even that was not the first class action to come Colonial’s way, after Slater and Gordon filed last year over allegedly uncompetitive superannuation returns.
Maurice Blackburn is also running a shareholder class action against Commonwealth Bank related to the share price fall related to AUSTRAC’s money-laundering allegations against CBA, which resulted in the largest civil penalty in Australian corporate history.
And CBA’s CommInsure life insurance unit was this month charged with 87 counts of unlawfully selling life insurance policies over the phone.
Commonwealth Bank, whose shares were 0.8 per cent lower shortly before Friday’s close, has been contacted for comment.