The Commonwealth Bank of Australia (ASX: CBA) will be brought before the Federal Court to face criminal charges of misleading customers.
The Australian Securities and Investments Commission (ASIC) revealed Thursday that 30 charges have been filed against the big bank after an investigation.
The matters relate to CBA's promotion and sales of add-on insurance products CreditCard Plus and Loan Protection.
ASIC and the Commonwealth Director of Prosecutions will allege that over 5 years the bank made "false or misleading representations" to customers that those insurance policies had some use to them.
This is despite, they allege, part or all of the benefits not being available to those clients.
The maximum penalty per offence is $1.7 million.
Commonwealth Bank announced to the ASX that it no longer sells the products under question.
"CBA will plead guilty to the charges and has agreed a statement of facts with ASIC and the CDPP," the bank stated.
"CBA has sent compensation to the 165 customers who are the subject of these proceedings where they paid premiums. CBA apologises to customers who were affected by these issues and accepts that this conduct was unacceptable."
Image source: Getty Images
CBA's behaviour was mentioned at the Royal Commission
A corporation facing a criminal, rather than a civil, case from an ASIC investigation is rare.
However, 2 criminal cases have been filed this year. They include this one, and charges against Bank of Queensland Limited (ASX: BOQ)-owned ME Bank back in May.
The corporate regulator also started a civil case against Westpac Banking Corp (ASX: WBC) in April.
Commonwealth Bank's alleged behaviour was mentioned in the finance industry Royal Commission back in 2018.
ASIC noted Thursday that CBA had cooperated with its investigations so far. The date for the first mention in the Federal Court has yet to be set.
CBA shares were up 0.73% on Thursday afternoon, trading for $102.17. They have risen almost 22% this year.
