The Commonwealth Bank of Australia (CBA) has pleaded guilty to a total of 30 criminal charges of making false or misleading representations when selling CreditCard Plus and Loan Protection policies to 165 customers between 2011 and 2015.
Put forward by the Australian Securities & Investments Commission (ASIC) in September, the Federal Court case is a result of the regulator’s detailed review of the sale of consumer credit insurance by 11 major banks and other lenders. ASIC’s Consumer credit insurance: Poor value products and harmful sales practices report was released in 2019.
“ASIC has been concerned about the consumer harms associated with add-on insurance for some time,” said ASIC deputy chair Sarah Court. “ASIC pursued a criminal case against CBA after it was clear customers had been sold insurance that they had no use for.
“Following a review of consumer credit insurance, ASIC banned the unsolicited sale of this insurance through cold calls, secured over $250 million in remediation for customers and has taken civil action against Westpac. Today we add criminal proceedings against CBA. These interventions were necessary because the industry did not put custoers front and centre.”
Adjourned to a date yet to be set, the matter was prosecuted by the Commonwealth Director of Public Prosecutions.
