The Federal Court of Australia has fined the CBA $ 7 million as a penalty for its overbilling case with the Australian Securities and Investments Commission (ASIC).
The proceedings against CBA, which began in November, focused on the bank’s deceptive statements and conduct. The bank was found to overcharged interest on small business loans from 2014 to 2018, with the total overcharged value reaching over $ 2.2 million.
The ABC said this was due to a system error – over 1,510 of its customers were charged a higher interest rate on their overdrawn accounts. Although the CBA admitted the allegations, it told the court it had “acted quickly” to remedy the error. However, that response, along with his submission of a fine of $ 4-5 million, was rejected by the court.
ASIC Commissioner Sean Hughes said ABC’s delay in cleaning up clients was an “aggravating factor” in the court’s determination of the penalty.
“When financial institutions discover overcharging, they must take immediate action to remedy affected consumers,” he said.
Hughes added, “Financial services institutions need to have the right systems, governance and controls in place to ensure they deliver on promises made to their customers.
The bank has so far remedied $ 3.74 million to affected customers in the case.
“CBA is now investing in its systems as a priority. All financial services institutions should make similar commitments to restore confidence in our financial system and avoid further failures, ”said Hughes.