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The Commonwealth Bank of Australia has been handed a USD 7 million fine for overcharging interest to customers.
The Federal Court of Australia determined that there were 12,119 instances where the bank had charged rates of interest on small business loans that were ‘substantially higher’ than what they should have been. The total amount of overcharged interest came to more than USD 2.2 million.
Customers were told they would be charged 16% interest in most cases, but a systems error saw more than 1,510 customers charged a higher rate of 34%.
CBA had argued that the appropriate penalty for the misconduct was USD 4-5 million, but corporate watchdog ASIC argued that the penalty should be USD 7 million.
The bank has addressed the problem that caused this error, and 2,269 customers have been issued refunds. The big bank has remediated USD 3.74 million to affected customers.
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