CBA continues to face scrutiny over its business practices, this time before the criminal courts
Australia’s largest bank the first to be referred to the criminal courts in the wake of damning evidence of industry-wide misconduct heard before the royal commission which handed down its report earlier this year
4 October 2019 | Staff Writers
Australia’s Commonwealth Bank is facing numerous criminal charges over the conduct of a life insurance arm which was sold by the bank in 2017 for $3.8 billion. Corporate regulator, the Australian Securities and Investments Commission (ASIC) alleges that between October and December 2014, CommInsure, through its agent telemarketing firm Aegon Insights Australia, unlawfully signed insurance policies through telephone sales.
CommInsure is a registered business of Colonial Mutual Life Insurance (CMLA) part of the Colonial group which was acquired by the Commonwealth Bank in 2000. It is alleged that the bank breached the Corporations Act by supplying the details and phone numbers of private customers to outside sales agents.
In a statement Australia’s corporate regulator said, “ASIC alleges that between October and December 2014, CommInsure, through its agent, telemarketing firm Aegon Insights Australia Pty Ltd (Aegon), unlawfully sold life insurance policies known as Simple Life over the phone. CommInsure provided customer contact details to Aegon from CBA’s existing customer database.
“ASIC alleges that the calls to CBA customers were unsolicited, and that CommInsure did not comply with all of the hawking exceptions in section 992A(3) of the Corporations Act.
“The maximum penalty for each of the charges is 125 penalty units ($21,250).”
CommInsure was sold in September 2017 to Hong Kong-listed AIA Group, Asia’s largest publicly listed life insurance group; there is no suggestion of impropriety on the part of AIA.
In a statement lodged with the ASX, CBA said, “The alleged contraventions relate to telephone sales of Simple Life insurance products by CMLA in the period 7 October 2014 to 16 December 2014, a practice that ceased at the end of 2014. CMLA reported breaches of anti-hawking provisions to ASIC. CBA and CommInsure are considering the matter, and CBA does not intend to comment further at this time.”
The case is listed for first mention in court on November 19 at the Downing Centre Local Court in Sydney.
Australia’s major banks are still reeling after multiple questionable practices were exposed by the Hayne Royal Commission into Misconduct in Banking, Superannuation and Financial Services. The commission received more than 10,000 separate submissions, 61% of which were related to the banking industry .
In an unrelated criminal case, a former National Australian Bank (NAB) adviser, Max Kiattisak Eung of Sydney was today sentenced in the NSW District Court to three years imprisonment for obtaining financial advantage by dishonesty in 2016. He pled guilty to withdrawing A$166,500 from two client accounts without the account holders’ knowledge.