Commonwealth Bank of Australia pleads guilty to consumer credit insurance fraud charges

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On Friday, the Australian Securities and Investments Commission (ASIC) said the country’s largest lender Commonwealth Bank of Australia (CBA) had pleaded guilty to 30 criminal charges for mis-selling consumer credit insurance between 2011 and 2015.

Scrutiny of Australian lenders and financial institutions has ramped up significantly since a Royal Commission inquiry in 2018 found widespread shortcomings in the sector, forcing companies and regulators to take swift action.

In September, the securities regulator said CBA had promoted and sold certain policies as an add-on insurance product to 165 customers by telephone and online.

A CBA spokesperson said that “the bank is no longer selling the products and the 165 customers affected had been compensated,” and also added that the company had fully cooperated with the ASIC during its investigation.

This case is similar to a civil lawsuit by ASIC against Australia’s no.2 lender Westpac Banking Corp in April. In this case, the company was selling consumer credit insurance to customers who had not agreed to buy it.

ASIC has decided to conduct a wider review into consumer credit insurance sales between 2018 and 2019. The ASIC has reviewed 11 banks and has served Australia and New Zealand Banking Group and National Australia Bank with similar lawsuits and scrutiny.

CBA has also been involved in multiple lawsuits recently, after having been sued for underpaying its staff earlier this month.

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