By Alice Uribe
SYDNEY--Commonwealth Bank of Australia says it does not plan to defend proceedings brought against it by Australia's corporate regulator for charging a rate of interest on business overdraft accounts substantially higher than what its customers were advised.
The Australian Securities and Investments Commission on Tuesday said it had commenced civil penalty proceedings in the Federal Court against Australia's largest bank.
The matter is in relation to some customers being overcharged interest exceeding 2.9 million Australian dollars (US$2.1 million) between December 2011 and March 2018.
CBA said Tuesday that it had cooperated fully with ASIC and does not intend to defend the proceedings. The bank added that 2,269 customers had been sent refunds totalling A$3.74 million.
ASIC said it is seeking declarations, pecuniary penalties and other orders against CBA for alleged contraventions of certain misleading and deceptive conduct provisions of the ASIC Act and breaches of the general obligations owed by financial services licensees under the Corporations Act.
The date for the first hearing is yet to be scheduled by the court.
ASIC investigated this matter following its consideration as a case study at the Financial Services Royal Commission, said CBA.
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(END) Dow Jones Newswires