ASIC is pursuing a multimillion-dollar penalty against one of the big four banks for alleged breaches of the ASIC Act and Corporations Act.
From May 2005 to December 2015, CBA sold customers the AgriAdvantage Plus Package (AA+) which, in exchange for the payment of package fees, entitled customers to benefits in the forms of fee waivers, interest rate discounts, and bonus interest on savings, on 22 CBA products.
But ASIC alleges that some customers were not provided the benefits, and that those customers were overcharged fees and interest on loans and fees, and underpaid interest on savings. CBA also overcharged AA+ Package fees to certain customers.
“ASIC's case is that the causes of CBA's failures included the highly manual nature of CBA's systems by which the AA+ Package benefits were applied, as well as, CBA having no systems or processes in place to check whether customers were receiving benefits,” ASIC said in a release.
“ASIC contends that a total of 8,659 customers were harmed by CBA's conduct on 131,542 occasions, in circumstances where CBA benefited from a total of $8,087,276 in incorrectly charged fees and interest on loans, and underpaid interest on savings.”
ASIC alleges that, from 16 March 2014 to 31 December 2015, CBA breached the ASIC Act on 123 occasions by making misleading representations and by engaging in misleading or deceptive conduct. ASIC also alleges that on 3905 occasions, CBA accepted payments for the provision of the AA+ Package benefits where there were reasonable grounds to believe that CBA would not be able to supply the benefits.
ASIC also alleges a number of other contraventions of the ASIC and Corporations Acts.
“ASIC will be seeking a total civil penalty up to $5 million subject to the conduct as alleged being found or admitted,” ASIC said in its statement.
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