The Federal Court has made orders requiring the Commonwealth Bank of Australia (CBA) to publish notices on its website and its newsroom acknowledging the bank’s false or misleading conduct when it overcharged interest on business overdraft accounts.
The notices, referred to as adverse publicity orders, require CBA to:
- publish, at its own expense, both a written and audio-visual notice on CBA’s website (https://www.commbank.com.au/) and its newsroom (https://www.commbank.com.au/newsroom.html), and
- ensure that each notice appears immediately upon access to the landing page as a picture tile on the websites under the heading “Notification of Misconduct by CBA” and is maintained on the websites for 90 days.
'The requirement for CBA to notify its customers and the general public that it unlawfully overcharged interest is an important part of deterrence, along with the $7 million fine handed down by the Court. Not only does it ensure that CBA's customers and the general public are aware of the misconduct, it sends a strong message that there is significant financial and reputational risk for failing to have the systems in place to prevent overcharging,' said ASIC Commissioner Sean Hughes.
CBA breached the law on 12,119 occasions when it charged higher-than-advised interest rates on business overdraft accounts (21-025MR). As a result of ASIC proceedings, CBA was ordered by the Court to pay a $7 million penalty for the misconduct (21-065MR).
CBA has been ordered to provide a proposed version of the audio-visual notice to the Court by 27 August 2021.
CBA must comply with these adverse publicity orders within 30 days.
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Background
On 30 November 2020, ASIC commenced proceedings against CBA for overcharging interest on business overdraft accounts. The total overcharged interest exceeded $2.2 million. CBA’s conduct in this matter resulted from inadequate systems and processes. CBA admitted to ASIC’s allegations (20-305MR).
CBA’s conduct was the subject of a case study by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry – see Volume 2 of the Interim Report (page 304-308).
CBA has remediated $3.74 million to the customers impacted in this case.