CBA sued by ASIC for allegedly overcharging customers

CBA is facing allegations that it incorrectly charged customers monthly access fees totalling almost $55 million over a nine year period, partially as a result of data entry errors and system misconfiguration.

The Australian Securities and Investments Commission (ASIC) has filed civil proceedings in the Federal Court against CBA’s conduct, which “occurred because of 30 different ways in which CBA’s systems and processes were inadequate, improperly configured or allowed manual errors that resulted in the [monthly access fees] being charged," the regulator alleged in a statement of claim.

ASIC alleges that between 2010 and 2019 CBA charged fees that should have been waived under contractual conditions.

Monthly access fees ranging from $4-$6 were supposed to be waived under specific criteria, such as if a minimum amount was deposited into the account or if the customer was a student.

ASIC alleged some charges were incorrectly levied due to wrongly archived data files or incorrect configuration of the bank’s systems. [pdf]

This impacted nearly 1 million customers and more than 800,000 accounts, with CBA pocketing $55 million. It received 14,000 complaints over a nine-year period.

It has since repaid $66 million, which includes interest amounts on the incorrectly charged fees.

ASIC criticised CBA for “failing to undertake an appropriate review of the multiple systemic issues” and for “ongoing failure of its systems.”

“ASIC commenced this proceeding because financial institutions need to have robust compliance systems to meet their obligations to customers," it said in a statement.

“Financial institutions need to put customers first, and customers should have confidence that the banks they deal with charge fees correctly.”

CBA released a statement apologising to impacted customers however, stated it will defend how the alleged breaches were expressed by ASIC.

A hearing date is yet to set by the Federal Court.