Criminal proceedings against the Commonwealth Bank regarding credit insurance have been dismissed due to the underlying criminal charges falling outside the statute of limitations.
In a media release on Tuesday morning, ASIC said CBA had previously pleaded guilty to 30 criminal charges of making false or misleading representations to customers when selling consumer credit insurance according to the ASIC Act. The conduct occurred between 2011 and 2015 and the proceedings were filed in 2021.
On 28 November 2022, in respect of a separate matter, the Full Court of the Federal Court found the relevant parts of the act have a limitation period requiring proceedings for an offence to be commenced within three years after the offence.
On 14 December 2022, the Federal Court made orders by consent dismissing the proceedings against CBA and that each party bear its own costs.
According to ASIC’s consumer-targeted MoneySmart website, credit insurance is intended to help protect consumers if they are unable to make repayments (due to loss of work or sickness) or if a credit card is stolen. However, MoneySmart considers the product poor value.
“Only 11 cents was paid for every $1 paid in premiums for CCI [consumer credit insurance] sold with credit cards,” MoneySmart’s website said. “Only 19 cents was paid for every $1 paid in premiums across all CCI products.”