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21-251MR ASIC brings criminal charges against CBA for mis-selling consumer credit insurance
Criminal charges have today been filed against the Commonwealth Bank of Australia (CBA) in the Federal Court for the mis-selling of consumer credit insurance.
The 30 criminal charges relate to CBA’s promotion and sale of CreditCard Plus and Loan Protection policies as an add-on insurance product in branches, by telephone and online. The charges relate to allegations that between 2011 and 2015, CBA made false or misleading representations to customers that the insurance policies had uses or benefits to those customers when part or all the benefits were not available.
The matter is being prosecuted by the CDPP after an investigation and referral by ASIC.
CBA has cooperated with ASIC’s investigation to date. The matter is to be listed for first mention in the Federal Court, Sydney, on a date to be fixed.
In December 2011, the maximum penalty for each offence increased from $1,100,000 to $1,700,000 per offence.
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 51-64).
This is the second criminal prosecution under consumer protection provision s12DB of the ASIC Act (alleging false and misleading representations) against a bank after ASIC filed charges against ME Bank in May 2021 (21-116MR).
In April 2021, ASIC also filed separate civil penalty proceedings against Westpac Banking Corporation for its selling practices regarding consumer credit insurance products (21-066MR).
The sentencing hearing has been scheduled for 29 October 2021.