The Federal Court has ordered Commonwealth Bank to pay a A$5 million penalty, after it found that the bank had breached the ASIC Act and the Corporations Act over the failings of its Agri-Advantage Plus Package (AA+ Package).
Between 2005 and 2015, CBA sold the package - promising fee waivers, interest rate discounts on loans and bonus rates on savings - in exchange for the payment of fees on 22 CBA products.
ASIC took the matter to court this year, alleging that CBA did not provide the advertised benefits and that, as a result, customers were overcharged.
The bank acknowledged the failings and conceded that it had no systems in place to check whether customers were receiving benefits.
A total of 8659 customers were affected. The bank has remediated its customers.
The court ruled that CBA’s representations about the AA+ Package’s benefits were false and misleading. The bank accepted payments where there were reasonable grounds to believe services would not be provided.
The court said: “Throughout the relevant period there was a poor control environment with no adequate system for reporting issues with the AA+ Packages. Further, CBA’s complaints handling processes were inadequate.
“CBA did not have an appropriate IT system in place to administer the AA+ Packages.”