CBA penalised $180,000 for overdraft breaches
The latest in a slew of industry-wide banking blunders.
Commonwealth Bank of Australia (CBA) has coughed up $180,000 in penalties for breaches relating to personal overdraft facilities.
The bank reported the matter to the Australian Securities & Investments Commission (ASIC) following an internal review identifying a programming error in its automated serviceability calculator, which is used to assess applications for particular personal overdrafts.
The bank's system failed to acknowledge and account for declared housing and living expenses of some customers between 2011 and 2015.
The calculator substituted $0 housing expenses and used a benchmark figure for living expenses. This amount, in some cases, was significantly less than that declared.
This resulted in the bank allowing overdrafts for 9,577 consumers that would have otherwise been declined and provided a further 1,152 with higher overdraft limits than would have otherwise been provided.
ASIC was concerned affected consumers would be unable repay their personal overdraft on demand.
As a result of its review, CBA will write off approximately $2.5 million in personal overdraft balances.
This multi-million dollar refund is the latest in a string of ASIC-enforced retributions.
Recently Westpac handed over $9.2 million in refunds after failing to waive fees on some of its accounts, as well as $20 million in compensation for incorrectly charging foreign transaction fees.
Earlier this month, ING handed over $5.38 million to around 24,500 members after acknowledging some of its promotional material was potentially misleading, while ANZ refunded $28.8 million in fees to retail and business bank customers after charging unnecessary periodical payments.
These decisions highlight the importance of selecting a bank account that minimises fees and costs.
The big four banks have beneficial transaction accounts, but you could be losing out on your savings.
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