Borrow
CBA to pay $7m penalty for overcharged interest
The Commonwealth Bank of Australia has been ordered to pay a $7 million penalty for charging an interest rate on business overdraft accounts that was substantially higher than what customers were advised.
CBA to pay $7m penalty for overcharged interest
The Commonwealth Bank of Australia has been ordered to pay a $7 million penalty for charging an interest rate on business overdraft accounts that was substantially higher than what customers were advised.
The Federal Court of Australia has ordered the Commonwealth Bank of Australia (CBA) to pay a $7 million penalty after declaring the bank guilty of making false or misleading representations and engaging in misleading and deceptive conduct.
These declarations related to 12,119 occasions when CBA charged a rate of interest on business overdraft accounts substantially higher than what its customers had been advised.
The rate, which customers were advised would be 16 per cent per annum in most cases, was said to rocket to around 34 per cent per annum.
In reaching the penalty decision, Justice Lee found that CBA’s conduct was serious, that the number of false and misleading representations were significant and that conduct of this type and nature must be prevented.
And while the CBA admitted to charging more than 1,510 customers a different and higher interest rate, the court rejected the bank’s allegations that it acted expeditiously to remedy the error.
“Financial services institutions need to have appropriate systems, governance and controls in place to ensure they deliver on promises made to their customers. When CBA failed to resolve this error after it was identified, customers were overcharged more than $2 million in interest,” ASIC commissioner Sean Hughes said in a statement.
Mr Hughes, however, commended the CBA for making investments in its systems as a matter of priority.
“All financial services institutions should make similar commitments to rebuild trust in our financial system and to avoid further failures,” he added.
CBA’s conduct was the subject of a case study by the Hayne royal commission.
RELATED ARTICLES
Banking
Open banking’s quiet revolution: how one broker’s data play rewrites speed, trust and margin
Open banking is shifting from compliance cost to commercial engine, and early adopters in Australia’s broking market are already monetising the curve. The playbook: consented bank-grade data piped ...Read more
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
RBA’s next move: Why a November cut could reset corporate risk budgets
Australia’s unemployment rate has risen to a four‑year high, sharpening the case for another Reserve Bank easing as growth moderates. With GDP expanding 0.6% in the June quarter and 1.8% year on year, ...Read more
Banking
PayPal Open Debuts in Australia: A Unified Platform for Business Growth
Sydney, 14 October 2025 – In a significant move to bolster commerce capabilities for businesses across Australia, PayPal has officially launched its new merchant platform, PayPal OpenRead more
Banking
RBA holds interest rates steady at 3.6% amid strong labour market and inflation concerns
In a widely anticipated move, the Reserve Bank of Australia (RBA) announced that it would maintain the cash rate at 3.6%. The decision was unanimous, reflecting a cautious approach as the central bank ...Read more
Banking
Hardship is the new conduct frontier: A bank’s playbook for turning ASIC scrutiny into ROI
ASIC has put financial hardship on its 2025 enforcement radar, shifting lender performance from a customer service problem to a board-level conduct risk. This case study examines how an Australian ...Read more
Banking
Open banking’s quiet revolution: how one broker’s data play rewrites speed, trust and margin
Open banking is shifting from compliance cost to commercial engine, and early adopters in Australia’s broking market are already monetising the curve. The playbook: consented bank-grade data piped ...Read more
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
RBA’s next move: Why a November cut could reset corporate risk budgets
Australia’s unemployment rate has risen to a four‑year high, sharpening the case for another Reserve Bank easing as growth moderates. With GDP expanding 0.6% in the June quarter and 1.8% year on year, ...Read more
Banking
PayPal Open Debuts in Australia: A Unified Platform for Business Growth
Sydney, 14 October 2025 – In a significant move to bolster commerce capabilities for businesses across Australia, PayPal has officially launched its new merchant platform, PayPal OpenRead more
Banking
RBA holds interest rates steady at 3.6% amid strong labour market and inflation concerns
In a widely anticipated move, the Reserve Bank of Australia (RBA) announced that it would maintain the cash rate at 3.6%. The decision was unanimous, reflecting a cautious approach as the central bank ...Read more
Banking
Hardship is the new conduct frontier: A bank’s playbook for turning ASIC scrutiny into ROI
ASIC has put financial hardship on its 2025 enforcement radar, shifting lender performance from a customer service problem to a board-level conduct risk. This case study examines how an Australian ...Read more
