media release (20-064MR)

ASIC commences proceedings against CBA over the credit services provided to problem gambler – Royal Commission case study


ASIC has commenced proceedings in the Federal Court against Commonwealth Bank of Australia (CBA) for alleged contraventions of the responsible lending provisions of the National Consumer Credit Protection Act 2009 (National Credit Act).

The action against CBA is for failures to take account of a notification by a customer (Mr Harris) that he was a problem gambler and to take reasonable steps to verify his financial situation before offering and approving a credit card limit increase.

ASIC alleges that in January 2017, CBA engaged in conduct that contravened the following provisions of the National Credit Act:

  1. sections 130(1) and 128, when it failed to undertake reasonable inquiries and verification of Mr Harris' financial circumstances prior to making an assessment to increase his credit limit;
  2. sections 131(1) and 133(1), in failing to assess that the credit limit increase was unsuitable for Mr Harris and in subsequently providing the credit limit increase; and
  3. section 47(1)(d) when it failed to comply with the National Credit Act.

The amount of any penalty will be determined by the court and each party will be making their own submissions to the court on the penalty range.

The National Credit Act provides consumer protections to ensure that credit providers make reasonable inquiries about a borrower's financial situation before assessing whether a loan contract will be unsuitable for the borrower.

The proceeding will be listed for directions on a date to be determined by the Court.


CBA's conduct with respect to credit cards and credit card limit increases was the subject of a case study by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Interim Report Volume 2, CBA Credit Cards, p101).

Since CBA's conduct, the law has changed, and now credit card providers must consider whether a consumer can repay an increased credit limit within a three year period set by ASIC (18-257MR). The law now does not allow credit limit increase offers like those Mr Harris received.

Additionally, ASIC has now set out our expectations that credit card providers do more to proactively assist consumers struggling with problem credit card debt. In 2018 we found that more than one in six consumers were struggling with credit card debt (18-201MR).

On 9 December 2019, ASIC published an updated version of its responsible lending regulatory guidance – Regulatory Guide 209: Credit licensing: Responsible lending conduct (RG 209).

The updated RG209 follows a consultation paper released by ASIC in February 2019. ASIC received 72 submissions, with 64 non-confidential submissions published on the ASIC website in response.

As part of our consultation, ASIC also conducted public hearings. In these hearings, ASIC heard from industry representatives, consumer groups, academics and service providers.

ASIC's action against CBA falls within ASIC's Wealth Management Major Financial Institutions Portfolio. The Portfolio focuses on the financial services conduct of Australia's largest financial institutions (NAB, Westpac, CBA, ANZ and AMP) with respect to credit and retail lending, financial advice, fees for no service, superannuation trustees, insurance, unfair contract terms and other licensee obligations, and other conduct arising from the Financial Services Royal Commission.

Media enquiries: Contact ASIC Media Unit