CBA fined, writes off $2.5m in loan balances

By Killian Plastow
 — 1 minute read

The Commonwealth Bank has paid $180,000 in infringement notices and will write off $2.5 million in personal overdraft balances that were issued in error.

Following ASIC surveillance, CBA reported that a programming error in the bank’s automated serviceability calculator had resulted in housing and living expenses for over 10,000 customers being substituted with a $0.

“As a result, this led to an over-estimation of the consumer's capacity to service the overdraft facility,” ASIC said.


The error resulted in 9,577 consumers being approved for overdrafts that otherwise would have been declined, and 1,152 consumers receiving higher overdraft limits than should have been permitted, ASIC said.

“ASIC was concerned that this conduct breached responsible lending laws and that affected consumers would have been unable to comply, or could only comply with substantial hardship, with their obligation to repay their personal overdraft on demand,” the regulator said.

“Credit licensees should continuously monitor their internal processes to ensure compliance with the law,” added ASIC deputy chair Peter Kell.

“This is especially the case with automated decision-making systems where ongoing monitoring is needed to ensure that information is correctly inputted into systems."

Commonwealth Bank has paid the four infringement notices it was issued, and will write off approximately $2.5 million in overdraft balances, ASIC said.

Read more:

Coalition backs down on lifetime cap

Central bank policy could steepen yield curves

Labour market remains solid: AMP Capital

Be wary of tech stocks, says Stockspot

New analysts join Contango investment team


The ifa Excellence Awards are back in 2021 and nominations are now open! This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021!


CBA fined, writes off $2.5m in loan balances
investordaily image
ID logo


related articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.