The Commonwealth Bank of Australia (CBA) has paid $180,000 following four infringement notices as a result of breaches of responsible lending laws when providing personal overdraft facilities.
CBA incorrectly approved 9,577 customers for overdrafts and 1,152 customers for high overdrafts between July 2011 and September 2015.
CBA reported the matter to the Australian Securities and Investments Commission (ASIC) following an ASIC surveillance and off the back of an internal review, which identified a programming error in the automated calculator, used to assess personal overdraft applications.
Consumers within the four year period were approved for overdrafts or increased limits, despite their declared expenses being greater than their declared income.
ASIC said that the conduct breached responsible lending laws, as consumers were clearly placed in a position whereby they would be unable to comply with overdraft terms.
ASIC has issued four separate infringement notices in the last month totalling $180,000 for breaches of the National Consumer Credit Protection Act 2009 (Cth).