Between 2011-15, the big four banks were found to have made false or misleading representations to customers relating to its CreditCard Plus and loan protection policies as an add-on insurance product. Customers were told that they could make a claim against their insurance policies when some or all were not available to them.
“ASIC has been concerned about the consumer harms associated with add-on insurance for some time,” ASIC deputy chair Sarah Court said on Friday.
“ASIC pursued a criminal case against CBA after it was clear customers had been sold insurance that they had no use for.”
The news comes on the back of the corporate regulator’s review of the sale of consumer credit insurance by 11 major banks and lenders.
In April, ASIC also took Westpac to court for alleged misleading and unfair sales. It was alleged at the time that the bank mis-sold consumer credit insurance with credit cards and other credit facilities to customers who had not agreed to buy the policies. It was further alleged that Westpac made false or misleading misrepresentations that customers had agreed to acquire, were liable to pay for, and that Westpac had a right to charge for CCI.
“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," Ms Court said.
“Today we add criminal proceedings against CBA. These interventions were necessary because the industry did not put customers front and centre."
A date for the matter is yet to be announced.
CBA has yet to publicly comment.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
