ASIC alleged and CBA admitted that it had charged a rate of interest on business overdraft accounts substantially higher than what customers had been advised on 12,119 occasions. CBA submitted that an appropriate penalty was $4-$5 million, but the court sided with ASIC, which asked for $7 million.
When CBA failed to resolve this error after it was identified, customers were overcharged more than $2 million in interest,” said ASIC commissioner Sean Hughes.
“CBA’s delay in remediating customers following this error was an aggravating factor in the court’s determination of the penalty. When financial institutions discover overcharging, they must take immediate action to remediate impacted consumers.”
The court 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”. Justice Michael Lee rejected CBA’s submission that it had acted “expeditiously” to remedy the error and found that the delay was “particularly troubling”.
“As recognised by Justice Lee, CBA made important admissions as to its many contraventions of the law. CBA is now 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,” Mr Hughes said.
How much of the $7 mill goes to ASIC & how much to the customers?
How are CBA going to cover the cost of paying ASIC?
I imagine increased fees to customers?
More funds for ASIC to take action against those in the industry with already empty pockets?
Who wins the game?
Headline you will never read “ASIC it take union super to court for made false or misleading representations and engaged in deceptive conduct”. In fact they will never even investigate that side of the fence…
Like everyone else before me – AGAIN, its the banks causing the brand and faith damage to this industry yet its the bloody advisers that cop it up the freckle. When will this totally unfair vendetta towards honest, overworked independent advisers stop? (and yes, I said INDEPENDENT as everyone knows what that really means).
This massive ‘donation’ from the CBA should be offsetting the levy ASIC just gauged out of OUR pockets.
How stiff were Dover to lose their licence and the stress created for 400 AR’s?
It’s a big game and Dover weren’t part of it.
CBA provided false and misleading information that meant 12,000 customers were made pay $2million more in interest than they were advised – $7 million penalty, executives face no charges or costs and they are free to continue BAU
Dover have a misleading document that not one customer was found to be disadvantaged – AFSL closed down and ordered to pay $1.2m and Terry $240k.
And ASIC wonder why no-one has any confidence in them.
Yes ASIC are a joke and Banks can actually get away with anything. The size of the fine is not that important, it is that no one is ever held accountable. Why have no bankers ever got into any trouble for all the crimes they committed?
If someone stole $2 million from other people they would go to jail, even if they paid $7 million to the customers they stole from. If a bank steals, launders money for terrorists, pressures doctors to change statements to avoid paying claims then they pay a TINY fine and no one gets in any trouble. Then back to business as usual.
Why do you think the banks keep breaking the law? It is because bankers are never ever ever ever held personally accountable.
And on it goes
Good – ASIC can reduce the Adviser levy now!!
So the fines just keep on coming to the banks. The real question is after a full royal commission examing this exact point why are the banks still ALLOWED to behave like this. Regrettably this further illustrates the royal commission missed the mark. They were played by the lenders, and as a result swallowed the misinformation, and ended up pursuing the brokers. Master manipulation absolutely. Simple solution, fines that are meted out, must be paid personally by the Bank CEO from their wages/share options/golden handshake (Not from the banks coffers, which is merely passed on to the consumer) and the CEO’s are under a 3 strike rule (3 Fines and says your OUT-Terminated without benefits). Let see how good/more vigilant compliance oversight then becomes
Just the tip of the iceberg, still it’s a start. Well done ASIC.
So this case was funded by the Levy on advisers and the penalties paid are part of the ASIC contribution to the Government coffers. When will it stop.
Good! This is what ASIC is there for not trying to kill off personal advice and advisers.
Who will check if the penalty is deducted from CBA profits or results in reduced management bonuses? No one of course and all CBA customers will just be gouged with increased fees and interest rate margins which the bank will explain by saying “Unavoidable due to cost increases”.