Major bank apologises for 'unacceptable' CCI conduct

www.theadviser.com.au
4 min read
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A big four bank has apologised to customers affected by "unacceptable" conduct in former CCI sales, which are now the subject of criminal charges.
The Commonwealth Bank of Australia (CBA) has acknowledged criminal proceedings that have been filed by the Australian Securities and Investments Commission (ASIC) in relation to CBA's sale of consumer credit insurance (CCI) products between 2011 and 2015. These products are no longer offered by the bank.

Consumer credit insurance is usually sold by lenders to borrowers when they take out a mortgage, personal loan or credit card and provides cover for consumers if they are unable to meet their minimum loan repayments due to unemployment, sickness or injury or to pay the outstanding loan balance upon death.

On Thursday (16 September), the financial services regulator announced that it had filed 30 criminal charges against the CBA in the Federal Court relating to CBA's promotion and sale of CreditCard Plus and Loan Protection policies as an add-on insurance product in branches, by telephone and online.

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According to the case brought by the ASIC, the charges allege that between 2011 and 2015, CBA made false or misleading representations to 165 customers by suggesting that the insurance policies had uses or benefits to those customers when part or all the benefits were not available.

This alleged behaviour focuses on whether the bank did not adequately disclose to those customers at the point of sale that they were not eligible for certain benefits under the CCI policies because of their employment status. If found guilty, this would contravene the ASIC Act.

The matter is to be listed for first mention in the Federal Court, Sydney, on a date yet to be fixed.

The big four's conduct was the subject of a case study by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

In a statement, the major bank acknowledged the case and said it would plead guilty to the charges.…
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