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Millions of Australians could get thousands of dollars back from the big banks

By Marni Dixit September 11, 2018
Australian cash

Are you getting some cash back?

News.Com.Au is reporting up to five million Australians could get thousands of dollars back from the big banks following what is set to be the largest class action in Australia’s history. 

Law firm Slater and Gordon is launching legal action on behalf of approximately one in three Australian workers who have their super invested with the banks.

It is believed the lawsuit could get some people as much as $3000 and will cost the banks $1 billion.

It’s believed that bank-owned super funds have been putting members’ money into the parent bank instead of the bank with the best interest rate, which means the workers will be paid between 0.5 and 1 per cent less interest than they should be. 

It’s estimated that for someone with $100,000 in cash, a 0.5 per cent difference would cost $3000 in six years. 

If someone has $25,000 in cash in an AMP retail fund they would lose $1600 in five years compared to someone in an industry fund who gets 2.59 per cent and lower fees, as opposed getting just 1.41 per cent interest and higher fees.

Slater and Gordon has created a website called getyoursuperback.com where you can register to be part of the suit. 

The law firms’s head of class actions Ben Hardwick told News.Com.Au:

“Millions of Australians are out of pocket and a handful of banks have lined their pockets.”

“Slater and Gordon doesn’t think that’s fair and we are saying, enough is enough.”

The first lawsuit will be announced on Tuesday and is against the Commonwealth Bank-owned Colonial First State and AMP. It is believed that 18 further class actions will follow against other bank-owned and retail funds.

“What funds like Colonial First State have been doing is dumping super with a parent bank such as CBA. The interest from the parent bank is so low that investors in the cash option are receiving rates as low as 1.25 per cent a year. This is even below the RBA cash rate.”

“This rate of return is ludicrously low. Standard bank interest should be around 2.0 to 2.5 per cent. That’s what most banks offer to ordinary customers with their normal term-deposits. And that’s what industry super fund members and some retail fund members have been getting.”

Official data has found that there are 28.6 million superannuation policies held by 14.8 million Australians.

Fifty five per cent of those have at least one retail account and almost all of these would have a cash component. Even if only two-thirds did, that would mean five million Aussies could join the suit.

Image: Getty