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.
The NSW Supreme Court has selected law firm Maurice Blackburn to be the one to take a shareholder class action against AMP following last ye...
APRA will soon be handing down new prudential standards around remuneration following the damning results of an inquiry into 36 of Australia...
EXCLUSIVE Now that he’s secured his leadership, Prime Minister Scott Morrison has a major opportunity to secure the future viability of t...