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Federal Court dismisses ASIC proceedings against CBA

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By Reporter
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3 minute read

The regulator alleged the bank engaged in misleading conduct over monthly access fees.

The Federal Court has dismissed proceedings brought by ASIC against the Commonwealth Bank (CBA) for misleading conduct over monthly access fees.

The regulator had alleged that 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.

Between 1 June 2010 and 11 September 2019, ASIC claimed that 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.

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Almost $55 million in fees were charged to nearly 1 million customers and more than 800,000 accounts.

The Federal 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.

The court also found that 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.

Additionally, CBA was found to not have 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 pursued this case because we believed CBA did not have robust compliance systems to ensure customers were being correctly charged,” said ASIC deputy chair Sarah Court.

“ASIC will carefully consider the judgment and continue to work to ensure large financial institutions charge fees correctly and put their customers first.”

The bank has undertaken remediation for the majority of customers impacted by the incorrect fee-charging, with approximately $64 million paid to almost one million customers as of September last year.

“There are some customers who have not been remediated, and CBA has not paid components of compensation or interest for some customers,” ASIC added.

Federal Court dismisses ASIC proceedings against CBA

The regulator alleged the bank engaged in misleading conduct over monthly access fees.

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