$150k Fine for Australian Bank Who Failed Problem Gambler

The Commonwealth Bank of Australia (CBA) has been hit by a huge fine - $150,000 AUD - for increasing the credit limit on the account of a known problem gambler…

By: Andrew Burnett

The CBA is the biggest banking multinational in the southern hemisphere, but ran afoul of the Australian Securities & Investments Commission (ASIC) after bumping the gambler’s limit up and violating the National Credit Act.

This happened despite the man, named in Federal Court as Mr Harris, telling the bank he didn’t want any more credit until he had conquered his gambling addiction.

The ASIC investigation saw the bank offer a $6000 increase to Mr Harris’ credit limit, taking it to over AUD$35,000 (USD$25,000). This resulted in Mr. Harris being unable to make the minimum monthly repayments of AUD $700 (US$500).

Mr Harris claimed he suffered from depression as a result of his debt, working 6 or 7 days a week and taking a loan from his employer to make ends meet.

The court heard that the ASIC investigation threw up numerous failings by the bank, including not verifying the customer’s financial situation, not asking him about his gambling issues and not taking reasonable steps to determine if his credit card was being used for gambling.

Justice Murphy, who levied the $150k fine on the bank, revealed the financial burden on Mr Harris caused by the interest repayments: “If he incurred no additional charges on his credit card and each month he paid only the minimum repayment it would have taken him 137 years and 10 months to pay off the balance.”

The CBA admitted the failings, specifically in relation to problem gamblers, and have since made an arrangement with Mr Harris over his debts.


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