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.
Shareholders pay the fines. Advisers pay the cost of taking it to court. ASIC can get another headline. The executives who were 100% responsible will walk out unscathed.
100% correct and the LNP pick up the fines into Consolidated Revenue.
Bank execs walk onto their next high paying job with a golden parachute out the door.
What a disgusting system ASIC & LNP run.
When is anyone coming after AMP???
Poor shareholders….and us advisers…as not one of the banking exec’s will lose any sleep over this let alone any $’s.
I just despair. These are “criminal charges” and yet not one criminal executive will be held accountable at CBA? If this was a small adviser they would be hounded out of the industry and probably jailed and quite rightly so. But the same does not apply if you are a bank exec responsible for instigating this criminal activity?
And to add insult the honest advisers will be paying for the litigation! I give up!
Yep, Narev has sailed off into the sunset (and SEEK) without a care in the world. Perhaps he might like to make a donation. Despicable.
Dear ASIC, please confirm exactly how much Advisers are being charged to be the legal finders yet again for a case against a big bank?
Surely you can spin it to say it’s up to Advisers to pay 60% yet again.
Time for ASIC to do something about the scam which is Mortgage Lenders Insurance.
The CBA is ASIC’s target bank in the same way as AMP has been the Financial Planning target. Can we safely assume that most of the other institutions are blame free . I doubt it.
Soooo who is paying for he legal action on this one? Advisers? It’s not really in the realms of financial planning.
CBA will again get away with a slap on the wrist. The nexus is not broken.