[Australian Network Compiled Report] Commonwealth Bank of Australia (CBA) will face criminal charges and a multi-million dollar (Australian dollar, the same below) fine for selling 165 customers insurance that was not eligible for benefits.
The Age reported that the Australian Securities and Investments Commission (ASIC) said on the 16th that it had filed 30 criminal charges against it for its insurance promotion and sales between 2011 and 2015. ASIC said the charges stemmed from Commonwealth Bank making false and misleading statements to customers. The maximum penalty for each charge is $1.7 million, and if the court imposes the maximum penalty, Commonwealth Bank would have to pay a penalty of $51 million for misconduct.
It is understood that the Commonwealth Bank promoted insurance to users who applied for credit cards, personal loans and mortgage loans, claiming that it would help borrowers repay their loans if they lost their jobs, were seriously injured or died. But many insured customers are unable to make such claims because they do not meet the bank's eligibility criteria regarding their employment status.
In response, the Commonwealth Bank stated that it had self-reported this issue to ASIC in 2015 and had cooperated with the regulatory agency’s investigation into the matter. Commonwealth Bank said it would plead guilty to the charges and "apologizes to customers affected by these issues and acknowledges that this behavior is unacceptable". (Compiled by Noy)
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