Commonwealth Bank of Australia (CBA.AX), the country’s top lender, said on Thursday it would plead guilty to 30 charges brought against it in the federal court for mis-selling consumer credit insurance (CCI) to its customers.
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.
The development follows criminal prosecution for alleged false and misleading representations against Bank of Queensland’s (BOQ.AX) unit ME Bank in May and a lawsuit against no. 2 lender Westpac (WBC.AX) in April.
The charges, filed by the Australian Securities and Investments Commission (ASIC) on Thursday, relate to promotion and sale of certain policies as an add-on insurance product to 165 customers, CBA said in a statement.
“CBA apologises to customers who were affected by these issues and accepts that this conduct was unacceptable.”
The ASIC said earlier in the day that between 2011 and 2015, CBA had made false or misleading representations about benefits of the insurance policies to customers when some or all of the benefits were not available.
The bank said it had self-reported the issue to the ASIC in 2015 and compensated the affected customers, adding that it no longer sells the products in question.
Earlier this year, CBA was separately sued by regulators for alleged compliance failures in delivering financial services, charging wrong access fees, and overcharging interest.