ASIC case against CBA dismissed by Court
The Federal Court has dismissed proceedings brought by ASIC against CBA regarding $55 million in fees being charged to almost one million customers.
It alleged CBA engaged in misleading or deceptive conduct, made false or misleading representations and contravened its obligations as an Australian financial services licensee by incorrectly charging monthly access fees to customers.
ASIC alleged that between 1 June, 2010 and 11 September, 2019, CBA incorrectly charged monthly access fees to customers who were entitled to fee waivers because they met certain criteria under their contracts with the bank.
Almost $55 million in fees were charged to nearly one million customers and more than 800,000 accounts.
The Court found that:
- In relation to fees incorrectly charged and recorded on a customer’s bank statement, the only representation by CBA was that a fee of a particular amount had been charged on or around the nominated date, and that the customer should check whether the entry was correct and notify CBA in the event of any error; and
- CBA did not represent that it would have adequate systems and processes in place to ensure that it could and would provide the applicable fee waiver when it entered into a contract with a customer to establish an account. Rather, CBA’s terms and conditions acknowledged that sometimes the bank “can get things wrong, and when this happens” the bank is “determined to make them right again”.
The Court also found that CBA had not breached its general obligation to do all things necessary to ensure that the financial services covered by its licence were provided efficiently, honestly and fairly.
ASIC deputy chair, Sarah Court, said: “ASIC pursued this case because we believed CBA did not have robust compliance systems to ensure customers were being correctly charged.
“ASIC will carefully consider the judgment and continue to work to ensure large financial institutions charge fees correctly and put their customers first.”
CBA had undertaken remediation for the majority of customers impacted by the incorrect fee charging. As at 13 September, 2021, CBA had paid $64 million in remediation to almost one million customers who were overcharged.
AUTHOR
Laura Dew
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This is embarassing for ASIC . Nothing but a bunch of public serpents playing activist with taxpayers money.
Golf clap for ASIC yet again. Better charge Financial Advisers more.