Australian ABC pleads guilty to consumer credit insurance fraud charges


The Commonwealth Bank of Australia logo adorns its headquarters in central Sydney, Australia on October 12, 2017. REUTERS / David Gray

October 29 (Reuters) – The Australian Securities and Investments Commission (ASIC) said on Friday that the country’s largest lender, the Commonwealth Bank of Australia (CBA.AX), had pleaded guilty to 30 felony charges of mis-selling consumer credit insurance between 2011 and 2015.

The scrutiny of Australian lenders and financial institutions has intensified dramatically since a 2018 Royal Commission investigation found widespread shortcomings in the sector, forcing companies and regulators to take swift action.

Last month, the securities regulator said the ABC had promoted and sold some policies as a supplemental insurance product to 165 customers over the phone and online. Read more

“The bank is no longer selling the products and the 165 affected customers have been compensated,” a CBA spokesperson said in an emailed statement, adding that the company had fully cooperated with ASIC during its investigation.

The news follows a similar civil lawsuit by ASIC against Australia’s No.2 lender Westpac Banking Corp (WBC.AX) in April for selling consumer credit insurance to customers who did not agree to credit. to buy.

ASIC is leading a broader review of consumer credit insurance sales between 2018 and 2019 by as many as 11 banks, and slapped the Australian and New Zealand banking group (ANZ.AX) and the National Australia Bank (NAB.AX) with similar prosecution and review. .

The ABC has also faced several lawsuits this year, after being sued for underpayment of its staff earlier this month. Read more

Yamini CS reporting in Bangalore; Editing by Sherry Jacob-Phillips

Our Standards: The Thomson Reuters Trust Principles.

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