• subs-bellGet the latest news! Subscribe to the ifa bulletin

CBA denies claims its comp scheme is ‘unfair’

CBA has rejected allegations by a former employee that the bank's compensation scheme is not in the favour of clients.

Fairfax Media reported this week that Russell Phillips, a former assessor with CBA's Open Advice Review program, told senators at a hearing on Wednesday that the bank is trying to lower the cost of the compensation.

"I feel very strongly that the scheme is not fair, it lacks integrity and apart from that it's very opaque to outsiders," Mr Phillips said, according to Fairfax.

However, in a statement, CBA refuted those claims.

"We reject allegations presented to the Senate inquiry today and stand by the independence and integrity of the Open Advice Review program," the statement said.

"We welcome scrutiny of the program and have today invited all Committee members to view the workings of the program and meet the team and the assessors first hand."

CBA's compensation scheme, which closed to new registrations in July, was set up more than a year ago in response to victims who lost money via its financial planning arm.


ifa reported earlier this month that as of the end of August, CBA had reviewed more than 8,800 cases and compensated $488,815 to 19 clients.

The bank had offered $950,252 to 53 customers, but 11 had rejected the offer while 23 have not yet decided, according to a third update from Promontory Financial Group, which was appointed to oversee the program.

That update also stated CBA had been struggling to retrieve files from one of its dealer groups. As at the end of August, the bank is still trying to locate hard-copy files for about 50 per cent of the cases associated with the bank's Financial Wisdom licence where a file is required.

Meanwhile, as a way to speed up the overall process, CBA added more than 100 people to its review team. Changes were made despite CBA chief executive Ian Narev saying in July that he was proud of the way the bank was responding through the Open Advice Review program.