• Andrea Beatty

Don’t gamble your luck – ASIC pursues CBA in proceedings in the Federal Court

On 16 March 2020, ASIC commenced proceedings in the Federal Court against Commonwealth Bank of Australia (CBA) for allegedly contravening their responsible lending requirements under the National Consumer Credit Protection Act 2009 (NCCP). The alleged contraventions relate to CBA allegedly increasing problem gambler Mr Harris’ credit card limit without making a proper assessment and verifying his financial situation.

ASIC’s investigations reveal that in January 2017, CBA had contravened the NCCP, in particular:

· sections 130(1) and 128 by failing to undertake reasonable inquiries and verification of Mr Harris’ financial circumstances prior to increasing his credit limit;

· sections 130(1) and 133(1) by failing to assess and conclude the credit limit increase was unsuitable for Mr Harris and subsequently, providing the increase; and

· section 47(1)(d), failing to comply with the NCCP.

These proceedings relate to the case study on Mr Harris heard during the Banking Royal Commission in late 2019 which investigated CBA’s conduct regarding credit cards and credit limit increases. These proceedings provide a timely reminder to adhere by responsible lending requirements.

ASIC’s proceedings are listed for directions on a date to be determined by the Federal Court.

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