CBA Faces First Criminal Charges Related to Royal Commission Report
1 November 2019: The Commonwealth Bank of Australia is facing the first criminal action in Australia that is a direct result of the extensive government-driven inquiry into widespread misconduct in the core financial services space there. This particular charge is against the life insurance entity of CBA, alleging unlawful sales of policies through unsolicited calls. Many more lawsuits are expected under a new regulatory policy (why not litigate).
ASIC said on October 6 that CommInsure (part of CBA) faced 87 counts of offering to sell insurance product in the course of non-compliant unsolicited phone calls. The inference is that high-pressure sales methods were used in the calls between October and December 2014. The calls were initiated by Aegon Insights, the telemarketing company employed by CommInsure.
The recent Royal Commission inquiry marked a change in approach, encouraging criminal rather than civil action, against miscreants especially in cases where public interest was at stake. The prosecutors need to assess the ‘nature, severity, impact and prevalence of the conduct’ before making that decision. Criminal actions have a higher standard of proof but any conviction means a more severe penalty, and potential individual imprisonment.