The Federal Court has dismissed proceedings brought by ASIC alleging Commonwealth Bank of Australia (CBA) engaged in misleading or deceptive conduct, made false or misleading representations and contravened its obligations as an Australian financial services licensee by incorrectly charging monthly access fees to customers.

ASIC alleged that between 1 June 2010 and 11 September 2019, 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 (21-063MR).

The Court found that:

• in relation to fees incorrectly charged and recorded on a customer’s bank statement, the only representation by CBA was that a fee of a particular amount had been charged on or around the nominated date, and that the customer should check whether the entry was correct and notify CBA in the event of any error; and
• CBA did not represent that it would have adequate systems and processes in place to ensure that it could and would provide the applicable fee waiver when it entered into a contract with a customer to establish an account. Rather, CBA’s terms and conditions acknowledged that sometimes the bank “can get things wrong, and when this happens” the bank is “determined to make them right again”.

The Court also found that CBA had not breached its general obligation to do all things necessary to ensure that the financial services covered by its licence were provided efficiently, honestly and fairly.

ASIC Deputy Chair Sarah Court said ‘ASIC pursued this case because we believed CBA did not have robust compliance systems to ensure customers were being correctly charged.’

‘ASIC will carefully consider the judgment and continue to work to ensure large financial institutions charge fees correctly and put their customers first.’

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Judgment

Background

Between at least 1 June 2010 and 11 September 2019, CBA’s terms and conditions stated that CBA would charge a monthly access fee between $4 and $6. CBA’s terms and conditions also stated that a waiver would apply where a customer met specific criteria, for example, if a minimum amount was deposited into the account each month or if the customer was a student.

CBA received approximately 14,000 complaints from customers about the fee overcharging from June 2010 to May 2019. CBA first identified problems with its systems which caused the overcharging in January 2011. CBA notified ASIC in December 2018 and lodged its first of a number of breach reports with ASIC in May 2019.

CBA has undertaken remediation for the majority of customers impacted by the incorrect fee charging. As at 13 September 2021, CBA had paid approximately $64 million in remediation to almost one million customers who were overcharged. There are some customers who have not been remediated, and CBA has not paid components of compensation or interest for some customers.