Commonwealth Bank of Australia (ASX: CBA) is facing court action over overcharging allegations first aired at the finance industry Royal Commission.
Australian Securities and Investments Commission (ASIC) has started a civil case against CBA for charging an overdraft interest rate “substantially higher” to what its business customers were told.
Over more than 6 years starting from December 2011, ASIC alleges the bank told customers an overdraft rate of 16% per annum, while actually slugging them 34%.
The lower rate continued to be published on periodic statements, the watchdog claims.
The bank tried to manually fix the overcharging error after a complaint was received in 2013.
However, the fix was unsuccessful and clients continued to be overcharged until March 2018, according to ASIC.
In total the overcharged interest amounted to more than $2.9 million.
The Motley Fool has contacted CBA for comment.
ASIC is seeking penalties and remediation orders from the court for multiple breaches of the ASIC and Corporations Acts.
The Motley Fool understands CBA has already created a compensation scheme that’s delivered $4 million to victims.
Commonwealth Bank shares went on an absolute tear in November, gaining 24% in value. It’s at $78.89 in early Tuesday trade.
These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)
Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.
Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.
Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.
Click Here For Your Free Stock Report
Returns As of 6th October 2020
More reading
- Here’s when your ASX bank dividends are being paid in December
- Why the banks are back in the ASX 200 spotlight
- ASX 200 Weekly Wrap: ASX 200 on track for a top month
- Is the CBA (ASX:CBA) share price overvalued?
- Which of these ASX bank shares offers the highest dividend?
Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post CBA (ASX:CBA) hauled to court over rip-off accusations appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3o93Fen
Leave a Reply