The Federal Court of Australia found the Commonwealth Bank of Australia (CBA) provided false or misleading information to its customers.
On 6 April 2021, Justice Lee of the Federal Court ordered CBA to pay a penalty of $7 million to the Commonwealth for providing false or misleading information to 1,510 customers with Simple Business Overdraft and Business Overdraft accounts.
CBA sent statements to the customers which showed that a particular interest rate had been charged. However, the statements were false or misleading because CBA had charged the customers interest at a significantly higher rate – often double the rate referred to in the statement. This happened in 12,119 account statements between 1 December 2014 and 31 March 2018.
By overcharging interest, CBA also broke the terms and conditions of its contracts with the customers.
The customers were overcharged interest totalling $2,238,554.94.
CBA acknowledges it took longer than it should have to rectify the issue after first being alerted to it by a customer complaint.
The customers have been remediated.
The Court ordered CBA to publish this Misconduct Notice.
For further information, visit ASIC’s media release here.
See the Court’s judgment here.