Criminal charges filed against big four bank for mis-selling consumer credit insurance

A total of 30 criminal charges have been filed against the Commonwealth Bank of Australia (CBA) in the Federal Court on Thursday, related to the promotion and sale of CreditCard Plus and Loan Protection policies as an add-on insurance product in branches, by telephone and online. 

According to a case brought by ASIC, charges relate to allegations that between 2011 and 2015, CBA made false or misleading representations to customers that the insurance policies had uses or benefits to those customers when part or all the benefits were not available.

The big four’s conduct was the subject of a case study by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. 

ASIC confirmed that CBA has cooperated with the investigation to date.

In a statement issued by the bank on Thursday, CBA said it will plead guilty to the charges and has agreed a Statement of Facts with ASIC and the CDPP.  

"CBA first self-reported the issue to ASIC in 2015. ASIC investigated this matter following its consideration as a case study at the Financial Services Royal Commission," a statement by the bank read. 

"CBA apologises to customers who were affected by these issues and accepts that this conduct was unacceptable," the bank added. 

It is understood that CBA has refunded its customers $75 million and faces a penalty of up to $51 million under the charges.

The matter is to be listed for first mention in the Federal Court, Sydney, on a date to be fixed.