ASIC and CBA wealth arm agree to $20m fine for MySuper deception

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Letters told customers an investment direction was needed for them to stay in their existing fund because of changes in superannuation law which came into effect in January 2014. The letters said if an “investment direction” was not provided, the members would be rolled into MySuper accounts, which could trigger “transaction costs”.

“As to the accuracy of the representations in circumstances where in order to maximise its prospects of obtaining investment direction it deliberately communicated with members in a way that was not candid and not transparent, and which gave rise to a real … risk of misleading members, as to whether the provision of an investment direction was required,” Mr Senathirajah said.

“The letter, that is, that equals at a minimum, reckless, and at a maximum, it was deliberate.”

Justice Murphy said he wanted to come to a final decision before a trial on another matter begins in a week and a half.

Mr Senathirajah said the total consumer loss from Colonial’s conduct was $52 million.

“We understand that there is another $45 million or so that Colonial proposes to remediate in relation to these matters in this proceeding. All ASIC asks for your honour to do at the moment is to proceed on the basis that we estimated total loss is $52 million. No more than that,” he said.

Justice Murphy is also due to hear a class action lawsuit against Colonial, filed in October 2019 by law firm Maurice Blackburn on behalf of customers, beginning in March next year.

The court heard Colonial has paid $77 million as part of its remediation program, including matters that were not part of ASIC’s case against it in this proceeding. Mr Senathirajah said it was ASIC’s understanding that none of the remediation for the 13,000 letters sent by Colonial had been paid, but some related to phone calls had.

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