Australian Securities and Investments Commission (ASIC) has ordered major banks to independently audit their cross-selling practices, where banks seek to sign customers up for multiple products, often in wealth management.
Affected Australian banks include ANZ, Commonwealth Bank, National Australia Bank, Westpac, Suncorp, Citi, Bank of Queensland and HSBC.
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The move follows the cross-selling scandal, engulfing American banking giant Wells Fargo.
ASIC deputy chairman Peter Kell told parliamentary committee that the commission wanted to ensure Wells Fargo-type problem had not occurred in the country.
Following this scandal, Wells Fargo was fined $100m by the US Consumer Financial Protection Bureau (CFPB) for secretly opening unauthorised deposit and credit card accounts.
Additionally, the scandal prompted CEO John Stumpf to resign in October 2016. The bank also dismissed 5,300 employees involved in the illegal sales practices.
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By GlobalDataThe Australian corporate watchdog said that the audit must look back three years and cover basic financial products. It will also review into consumer complaints where clients believe they did not apply for a product and the process for detecting such misconduct.
