ASIC
has commenced proceedings in the Federal Court against Commonwealth Bank of Australia (CBA) for alleged contraventions of the responsible lending provisions of the National Consumer Credit Protection Act 2009 (National Credit Act).
The action against CBA is for failures to take account of a notification by a customer (Mr Harris) that he was a problem gambler and to take reasonable steps to verify his financial situation before offering and approving a credit card limit increase.
ASIC alleges that in January 2017, CBA engaged in conduct that contravened the following provisions of the National Credit Act:
- sections 130(1) and 128, when it failed to undertake reasonable inquiries and verification of Mr Harris’ financial circumstances prior to making an assessment to increase his credit limit;
- sections 131(1) and 133(1), in failing to assess that the credit limit increase was unsuitable for Mr Harris and in subsequently providing the credit limit increase; and
- section 47(1)(d) when it failed to comply with the National Credit Act.
The amount of any penalty will be determined by the court and each party will be making their own submissions to the court on the penalty range.
The National Credit Act provides consumer protections to ensure that credit providers make reasonable inquiries about a borrower’s financial situation before assessing whether a loan contract will be unsuitable for the borrower.
The proceeding will be listed for directions on a date to be determined by the Court.
