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Commonwealth Bank refunds $80 million

Commonwealth Bank home loan customer? If you hold a wealth package, you could be in line for a refund, with the Commonwealth Bank of Australia (CBA) to refund approximately $80 million to around 216,000 Wealth Package customers as compensation for failing to apply fee waivers, interest concessions and other benefits since 2008. It equates to an average refund per customer affected of around $370, which includes interest.

How did the Commonwealth Bank issue occur?

For an annual fee, the Commonwealth Bank’s Home Loan Wealth Package offered benefits such as interest rate discounts and fee waivers in relation to a range of products including home loans, credit cards, transaction accounts, personal loans, overdrafts and insurance. However bank staff had to manually apply many of the discounts available under the Wealth Package, which in some instances did not occur.

Internal bank auditing discovered that an exception report, which was designed to detect when the discounts were not properly applied, was not working properly.

CBA discovered the breach following a customer complaint and reported it to ASIC in 2014.

“Manual processes to apply discounts, waivers and other concessions involve inherent compliance risks,” said ASIC Deputy Chairman Peter Kell.

“Licensees should carefully consider whether those risks are being appropriately managed, or are capable of being appropriately managed.”

 

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Responding to the announcement of the repayment, the Commonwealth Bank said that it strives to deliver the highest levels of customer service.

“I apologise to customers who have not received the full benefits of their home loan package due to our mistake,” said Matt Comyn, Group Executive, Retail Banking Services.

“Once we discovered the error we notified the regulator, ASIC. We worked to identify those customers who were due a refund, and the amount owed to them, including interest. We have commenced contacting these customers.

“An independent expert was engaged from the outset to review and validate the refund approach and program. At the same time, we have taken steps to address the root causes of the error, including changes to controls, systems and processes.”

Think you might be affected? You can contact the bank on 1800 785 683 (9am-5pm AEST Monday-Friday).

 

Image credit: iStock – Nill Versemann
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