ASIC has announced that they are to sue Commonwealth Bank of Australia (CBA) for charging customers unnecessary monthly fees.
The regulator have alleged that, between June 2010 and September 2019, the Big Four bank charged customers who should have received fee waivers. This is thought to have affected 800,000 customers to the tune of $55 million in fees.
“For the period between 1 April 2015 and 11 September 2019, the period for which the Court can impose a penalty, ASIC alleges that CBA incorrectly charged monthly access fees on approximately 2.4 million occasions, totaling around $11.5 million,” said an ASIC statement.
“ASIC alleges that CBA incorrectly charged monthly access fees to customers entitled to fee waivers due to systems and processes that were inadequate or improperly configured in 30 different ways, as well as due to manual errors made by CBA staff.”
ASIC also allege that, as CBA told customers every time that they charged them, they also made false or misleading representations to that customer, resulting in a second charge from the regulator.
Similarly, as these charges were included in contracts between CBA and customers, these contracts also constitute false or misleading representations. Compounded, these two allegations result in a third allegation, that of misleading or deceptive conduct by CBA, which is a contravention of their obligation as an Australian financial services licensee bound by financial services law.
CBA themselves have copped a $5 million fine for overcharging customers in the past, with ASIC holding them to account for their treatment of customers under their AgriAdvantage Plus product.
"Commonwealth Bank of Australia acknowledges that civil proceedings have been brought by the Australian Securities and Investments Commission in the Federal Court against CBA alleging contraventions of certain misleading and deceptive conduct provisions of the ASIC Act and breaches of the general obligations owed by financial services licensees under the Corporations Act," read a statement from the bank.
"The proceedings relate to errors by CBA where monthly account fee waivers were not applied to accounts for certain customers between 1 June 2010 and 11 September 2019. CBA accepts these errors should not have occurred and has provided several breach reports to ASIC in relation to these issues. ASIC does not allege that any of the contraventions were deliberate. CBA has co-operated fully with ASIC during its investigation, however it does not accept the way that the alleged contraventions have been formulated in the proceedings and therefore will defend the matter."
"CBA apologises to all customers impacted by these issues. Remediation payments of $64.2m (including interest) have been sent to customers. Of the total remediation payments approximately 90% related to two fee waiver issues that were identified in 2017 and 2019."
