Fees-for-no-service compo blows out to $850 million
The 'fees for no service' scandal that crippled AMP's public standing in April is poised to hack deeper into the reputations of other financial services providers after ASIC revealed that the compensation bill for the industry as whole had blown out by a further A$600 million.ASIC revealed the ballooning estimate of future payouts in a media release on Tuesday in which it also confirmed that the four major banks and AMP had already paid or offered customers $222 million in refunds for failing to provide advice after they levied fees.The regulator said the total compensation bill facing the sector over fees for no service breaches would exceed $850 million.AMP is expected to account for most of the additional $600 million of compensation after it advised ASIC that it expected to shell out $360 million in refunds and interest to affected customers.State Plus, the national financial planning arm of State Super, claims that an "oversight" led it to impose fees on more than 40,000 customers without providing financial advice.The company has already paid out $37 million in compensation and according to ASIC has provisioned another $53 million to cover future remediation.NAB's total bill to cover fees for no service payouts has climbed to almost $110 million after its NULIS subsidiary almost trebled its estimate of additional compensation.Commonwealth Bank's final bill for FFNS remediations will exceed $143 million after it confirmed it had provisioned for additional payments of around $25.2 million.Mystery surrounds the respective exposures of Westpac and ANZ to the illegal fee-skimming practice.ANZ has already paid out $50 million to affected customers and taken additional provisions to cover future compensation, but has not yet shared details of the provision with ASIC.Westpac, which has returned $6.8 million to customers it ripped off, also has not revealed an estimate of its future remediation bill.Bendigo and Yellow Brick Road are also facing compensation bills.Bendigo is expecting to shell out $2.5 million while Yellow Brick Road is expected to return $101, 477.