News: CBA Commonwealth Bank of Australia faces civil suit over overcharged interest

Dec 1 (Reuters) - Australia's corporate regulator filed on Tuesday a civil lawsuit against Commonwealth Bank of Australia (CBA) for charging customers an interest rate higher than advised over a seven-year period.

A systems error led Australia's biggest bank to overcharge interest on business overdraft accounts to a total of more than A$2.9 million ($2.13 million) between 2011 and 2018, the Australian Securities & Investments Commission (ASIC) said.

CBA "provided customers with terms and conditions for certain credit facilities that stated an interest rate to be charged or that had been charged," the regulator said in its statement, adding this was 16% a year in most cases.

However, the error caused more than 2,200 customers to be charged a higher rate, of about 34%, in most cases, it said.

And even after unsuccessfully trying to fix the overcharging error following a complaint in 2013, customers continued to face higher rates than stated.

CBA did not immediately respond to a Reuters request for comment. ASIC said CBA has a remediation program that has compensated affected customers to the tune of A$4 million.

Between Dec 2014 and March 2018, CBA breached financial services laws on 12,119 occasions, the regulator added. The suit stems from a case study from the damming Royal Commission two years ago into the industry. ($1=1.3592 Australian dollars)