CBA to write off $2.5 million in loan balances

Elizabeth Barry 15 September 2016 NEWS

commbank asic

The Big Four lender incorrectly approved personal overdrafts over a four-year period.

Commonwealth Bank has paid four infringement notices of $180,000 and will be required to write off loan balances after a system error allowed ineligible customers to be approved for personal overdrafts.

Between July 2011 and September 2015, a serviceability calculator used by the bank attributed $0 housing and living expenses which led to an over-estimation of the borrower's capacity to manage the loan. Approximately 10,000 customers were affected, with 9,577 being approved for overdrafts that would have otherwise been declined and 1,152 being approved for higher limits than they could afford.

CBA reported the error to ASIC following an ASIC surveillance. CBA's executive general manager of retail products and strategy, Clive van Horen, apologised to customers on behalf of the bank.

“When we make a mistake that impacts our customers we will put it right to ensure our customers are not adversely affected," van Horen said. “Once we identified this error, we informed the Australian Securities & Investments Commission and have been working with the regulator as we correct this issue for affected customers. We continue to review our systems and processes to ensure we are delivering the best possible customer experience."

Affected customers will be contacted to inform them of the error, as well as to reduce or remove incorrectly-approved overdrafts. The bank will also write off any debt associated with affected accounts, which amounts to $2.5 million. Customers' credit histories will not be affected as a result of the mistake.

Latest news headlines

Gil C /

Get more from finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site