How will Slater and Gordon get my money back from the banks?
We have commenced a wave of class actions against the big bank-owned super funds we think may be liable for misconduct. Millions of Australians will potentially be eligible to join these class actions and get their money back.
Some class actions will focus on excessive fees and look to claw back the difference between the fees charged and what a fund acting in the best interests of members would have charged. Others will look at 'super cash rip-offs' where fund members have received uncompetitive interest rates on their cash investments.
Our first class action has already been filed against the Commonwealth Bank and its Colonial First State superannuation fund. We allege that Colonial First State failed to secure the most competitive interest rate available for its members when it invested the cash component of their super with its parent company, the Commonwealth Bank. This claim could exceed $100 million and reimburse hundreds of thousands of wronged superannuation members.
What is a ‘super cash rip-off’?
When you hand over your wages to a superannuation fund, there are many different ways that they can invest it. The safest and most conservative approach is cash. With a cash investment, your money is not riskily invested in the market; it's just invested in a bank account where it collects interest.
When your super fund invests your money in cash, it doesn't have to do anything. It just takes your money and puts it in a bank. If your super fund is owned by a big bank, they will usually put your money into that parent bank. However, the fund has a legal duty to get you the best possible interest rate.
What funds like Colonial First State have been doing is dumping super with a parent bank, such as the Commonwealth Bank, despite it not offering the best returns for members. The interest rate from the parent bank has in some cases been as low as 1.25% per year.
This rate is ludicrously low. Standard bank interest rates should be around 2.0 to 2.5 per cent. That's what most banks offer to customers for term deposits. We are determined to hold bank-owned super funds to account for failing to obtain the best possible interest rate for cash investments - instead, opting for the one on offer from a parent bank and boosting their own revenues with trail commissions.
Thanks for registering your interest, we'll keep you updated regarding new developments and progress in the Get Your Super Back campaign.
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