Australia's corporate watchdog has taken Commonwealth Bank (ASX: CBA) to the Federal Court, alleging it charged customers monthly access fees when it was not entitled to do so.
The Australian Securities and Investment Commission (ASIC) alleges between 1 June 2010 and 11 September 2011 CBA incorrectly charged monthly access fees to customers who were entitled to fee waivers.
Almost $55 million in fees were allegedly overcharged to nearly one million customers and more than 800,000 accounts.
Further, for the period between 1 April 2015 and 11 September 2019, the period for which the Federal Court can actually impose a penalty, ASIC alleges CBA incorrectly charged monthly access fees on 2.4 million occasions, totalling around $11.5 million.
The watchdog claims the allegations amount to misleading or deceptive conduct, and that the bank contravened its obligation as an Australian financial services licensee.
ASIC also alleges that CBA failed to provide financial services efficiently, honestly and fairly by:
- failing to apply monthly access fee waivers to customer accounts after it had represented it would do so;
- failing to maintain systems and processes that were capable of meeting obligations to customers; and
- failing to undertake an appropriate review of the multiple systemic issues that contributed to the ongoing failure of its systems to apply monthly access fee waivers in accordance with the bank's contract with its customers.
The proceeding will be listed for a case management hearing on a date yet to be set.
CBA has issued a statement to the ASX regarding the civil proceedings, saying it "accepts these errors should not have occurred", but does not agree that all the details are accurate.
"CBA has co-operated fully with ASIC during its investigation, however it does not accept the way the alleged contraventions have been formulated in the proceedings and therefore will defend the matter," CBA said.
"CBA apologises to all customers impacted by these issues. Remediation payments of $64.2 million (including interest) have been sent to customers. Of the total remediation payments approximately 90 per cent related to two fee waiver issues that were identified in 2017 and 2019.
"The remediation of customers affected by the issues in these proceedings has been completed. CBA continues to invest in strengthening its systems and procedures."
CBA completes Australian life insurance business sale
The divestment of CBA's Australian life insurance business CommInsure Life has been completed today via a statutory asset transfer to Asian insurance giant AIA.
CBA has now received around $2.4 billion of aggregate proceeds in relation to the divestment of CommInsure Life, including the receipt of the final instalment of approximately $100 million.
Shares in CBA are down 0.19 per cent to $85.94 per share at 10.49am AEDT.Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.
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