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CBA liable for overcharging 1,510 customers in excess of $2.2m
Commonwealth Bank has been held accountable for overcharging 1,510 customers in excess of $2.2 million, among a suit of other breaches including “deceptive conduct”.
CBA liable for overcharging 1,510 customers in excess of $2.2m
Commonwealth Bank has been held accountable for overcharging 1,510 customers in excess of $2.2 million, among a suit of other breaches including “deceptive conduct”.
The Federal Court has declared Commonwealth Bank liable for misleading and deceptive conduct on 12,119 occasion after the bank was found to have overcharged 1,510 customers a higher interest rate of some 34 per cent per annum on their overdraft accounts, instead of the advised 16 per cent.
The total overcharged interest exceeded $2.2 million.
The “system error”, CBA admitted, meant that customers were made to believe they were being charged the agreed 16 per cent during the period from 1 December 2014 to 31 March 2018.
The customers had been advised otherwise in terms and conditions the bank provided for certain credit facilities and in periodic account statements referencing the rate at which interest was being charged.
In a statement issued on Tuesday, ASIC said it considers that CBA’s conduct in this matter, which was examined in detail during the financial services royal commission, resulted from inadequate systems and processes.
“Financial services institutions need to have appropriate systems, governance and controls in place to ensure they deliver on promises made to their customers. By CBA failing to take adequate steps to rectify this error after it was identified, this resulted in customers continuing to be overcharged,” said ASIC commissioner Sean Hughes.
“Investment in good systems needs to be prioritised by all financial services institutions to ensure trust in our financial system is rebuilt and to avoid a repeat of these failures in the future.”
ASIC confirmed that it will seek pecuniary penalties and other orders against CBA at a penalty hearing on 6 April 2021.
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