The Australian Securities and Investments Commission has opened civil proceedings in a federal court against Commonwealth Bank of Australia which, it says, charged monthly access fees to retail customers in connection with transaction accounts when it was not entitled to do so. The possession of a 'wealth package' was one of the criteria for exemption from such fees.

Between 1 June 2010 and 11 September 2019 (the so-called relevant period - a term that the Australians have borrowed from the British), according to the regulator, Commonwealth Bank of Australia levied its erroneous charges.

The customers were entitled to waivers of the monthly access fees whenever they met specified criteria. CBA, according to ASIC, charged them incorrectly because of 30 different ways in which its systems and processes were inadequate, improperly configured or allowed manual errors that resulted in the charges. During the period, CBA charged monthly access fees to customers incorrectly on at least 7 million occasions, affecting almost a million customers and more than 800,000 accounts, with CBA receiving almost A$55 million in monthly access fees contrary to the transaction account terms and conditions, contained in a document titled "Transaction Savings and Investment Account terms and conditions." Of those contraventions, approximately 2.4 million occasions, with an approximate value of $11.5 million, occurred between 1 April 2015 and 11 September 2019.

CBA is the largest listed company in Australia by market capitalisation, which stands at A$151 billion. As at 30 June 2020, its total assets exceeded A$1 trillion and it reported a net profit of A$9.634 billion (after tax) for that financial year.

Dishonesty is part of the charge that the regulator has levelled against the bank. It writes in its concise statement to the court: "On each occasion that CBA charged a customer a monthly access fee in circumstances where CBA should have applied a monthly access fee waiver, CBA expressly or impliedly represented in trade or commerce and in connection with the supply of financial services that it had a contractual entitlement to do so, when it did not."

The regulator alleges that the bank 'harmed' more than 969,457 customers on at least 7,033,346 occasions, in circumstances where CBA (before remediation) benefited from a total of A$66 million (including interest) in incorrectly-charged fees.

Some deposit and transaction accounts held by Wealth Package customers [here the regulator's lawyers have written, somewhat unhelpfully, "need to explain what this is"] were entitled to monthly access fee waivers. As a result of the configuration of CBA’s systems, these waivers had to be applied manually and the staff who did this made mistakes. Some customers who were entitled to waivers did not receive them.

The possession of a "wealth package" was one of the criteria that made a retail customer eligible for a waiver. The wealth package was known as Project Phoenix. Any customer was allowed to apply for a wealth package by reason of having (or being in the process of applying for) a home loan or Viridian Line of Credit with an initial package lending balance (being the sum of the account balances of eligible home lending accounts and the credit limit of Viridian Line of Credit accounts that the customer has at the time of appyling) of at least A$150,000.