From: RegTech Analyst
The Australian Securities & Investments Commission (ASIC) has launched a legal battle against one of Australia’s biggest banks.
The regulator has taken Commonwealth Bank of Australia (CBA) to federal court alleging that the bank has breached the ASIC Act and the Corporations Act by failing to provide the benefits outlined in its AgriAdvantage Plus Package to 8,659 customers.
Between May 2005 and December 2015, the bank sold the package to customers. By buying it, these customers would be entitled to benefits in the form of fee waivers and interest rate discounts, and bonus interest on savings on 22 CBA products.
However, ASIC alleges that many customers did not get access to these benefits. The regulator is arguing that CBA harmed customers by not providing certain benefits to customers and, as a result, customers were overcharged fees and interest on loans and fees, and underpaid interest on savings. CBA also overcharged AgriAdvantage Plus Package fees to certain customers, according to the regulator.
It suggested that CBA did not have systems in place to ensure customers received the benefits they had paid for.
ASIC alleges that a total of 8,659 customers were harmed by CBA’s conduct on 131,542 occasions, which the bank benefited from a total of $8,087,276 in incorrectly charged fees and interest on loans, and underpaid interest on savings.
The regulator also claimed that CBA accepted payments on 18,679 occasions for the provision of the package benefits when there were reasonable grounds for believing CBA would not be able to supply the package within a reasonable time.
ASIC also accused CBA of engaging in misleading or deceptive conduct by telling customers that it had adequate systems and processes in place to ensure customers received, and would continue to receive, the benefits in accordance with the terms and conditions.
The news comes after the bank has faced accusations in October 2019 of having broken Australia’s anti-hawking laws multiple times between October and December 2014.
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