The languid culture at the top of Commonwealth Bank and its lousy systems and technology receive brutal treatment in the opening round of Federal Court proceedings bought by ASIC over alleged wrongful collection of monthly access fees on a range of common accounts.
ASIC on Friday alleged that from April 2015 to September 2019 - the period for which the Court can impose a penalty – “CBA incorrectly charged monthly access fees on approximately 2.4 million occasions, totalling around $11.5 million.”
For the longer span from June 2010 to September 2019, ASIC contends 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.
“Almost $55 million in fees were charged to nearly one million customers and more than 800,000 accounts.”
The most astounding allegation in the Concise Statement to kick off the claim is that Matthew Comyn, the managing director, was left in the dark for more than two months on one critical development in this CommBank affair.
On 29 November 2018, CBA received an auditor notification letter from PwC, “stating that PwC had become aware of circumstances that constituted, or may have constituted, contraventions of conditions of CBA’s Australian Financial Services Licence," ASIC explains in the claim.
“Following receipt of the letter (from 29 November 2018), senior executives at CBA were informed that customers were being charged MAFs incorrectly,” ASIC said.
And then, and only then (on the ASIC version) was “CBA CEO Matt Comyn informed that monthly access fees were being charged incorrectly to customers”.
Divergence in product design for otherwise template transaction account products, and discretion for staff, allowed basic errors to multiply.
Manual errors in the classical sense were also common, while in some case critical data files “were not manually uploaded on time by CBA staff as required between October 2015 and September 2018”, an observation by ASIC that casts new light on CBA’s technology smarts and oversight.
Commonwealth Bank, in a statement to the ASX, said it refunded A$64 million to customers.
The bank said it “co-operated fully with ASIC during its investigation, however it does not accept the way that the alleged contraventions have been formulated in the proceedings and therefore will defend the matter.”
ASIC alleges that CBA engaged in misleading or deceptive conduct and contravened its obligation as an Australian financial services licensee to comply with financial services laws.
ASIC also alleges that CBA failed to provide financial services efficiently, honestly and fairly.