The Commonwealth Bank of Australia could have faced $8 million in fines for misleading advertising but felt a $300,000 community benefit payment was punishment enough.
The financial services regulator effectively asked CBA’s CommInsure if it was happy with the proposed action over misleading statements in website ads that broke the law.
CBA and its insurance business only formally acknowledged its ads were misleading in the banking royal commission on Thursday.
The issue related to statements in four website ads about the extent to which customers would be entitled to cover for trauma if they suffered a heart attack.
Email exchanges between the Australian Securities and Investments Commission and CommInsure last year show the regulator asked the company if its proposal was sufficient to resolve the matter.
Royal commissioner Kenneth Hayne QC said it was the regulator asking the regulated if the proposal was sufficient in the eyes of the party alleged to have broken the law.
CommInsure executive general manager Helen Troup said it was two organisations resolving the matter satisfactorily for both companies, and the insurer could have taken an approach of continuing to defend its position.
Hayne said the $300,000 payment was a very small amount when CommInsure could have faced a maximum punishment of $8 million.
Troup said CommInsure did come out of the process thinking it had been punished.
“I think we feel the $300,000 community benefit payment was a form of punishment.”
With AAP.
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