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Aussie Bank Fined $150,000 for Upping Problem Gambler's Credit Limit

Tags: Australia, CBA, Commonwealth Bank of Australia, problem gambling.
Posted on 16 November 2020 by "T".

The Commonwealth Bank of Australia (CBA) has been fined AU$150,000 (US$107,050) by the Federal Court on October 22nd for upping the credit card limit of a problem gambler.

The bank has breached the National Consumer Protection Act 2019, according to the Federal Court.

The Bank Knows

The client, David Harris, has specifically made the bank aware of his gambling addiction in October 2016. A roofer earning $70,000 a year, Harris informed the CBA was informed that he does not want to increase his credit card limit until he got over his addiction, therefore breaching section 133(1) of the Act.

However, when Harris requested to have his credit limit increased in January 2017, the CBA agreed.

Harris had maxed out three credit cards and the bank then combined all into one. His limit was initially increased from $27,100 to $32,000. Later on, he received a letter offering to increase it by another $3,000, despite the CBA's maximum credit card limit of $8,000.

According to Justice Bernard Murphy, with minimum repayments and no additional charges, it will take Harris a total of 137 years and 10 months to pay off the debt worth $35,706.91.

Failure to Check on Problem Gambler

The Federal Court stated the CBA failed to evaluate the situation and to ask about the customer's problem gambling before providing the funds. Also, the CBA failed to check on his financial situation and if he was still using his credit card for gambling.

Unfortunately, Harris at that time still had a gambling problem when the CBA made the additional funds available. Thus, the bank clearly breached section 131(1) as they have not assessed what the money would be used for. For not making the necessary verifications, the CBA also breached section 128 (d).

Hardship Arrangement between Customer and Bank

Harris ended up in serious debt after a multi-year gambling binge, thanks to funding from the bank's cards.

Justice Murphy said, "He was only able to continue to pay off his credit card because he worked extended periods without rest days, working 6 to 7 days a week, in physically demanding work as a roofer. He was also reliant on winnings from gambling and a loan from his employer."

"CBA was not responsive to Mr. Harris' difficulties," the court said. He became physically and mentally exhausted, had trouble sleeping and started to suffer from anxiety and depression.

CBA accepted the penalty as appropriate.

A spokesperson of the CBA said, "We did not do the right thing by our customer and we again apologize to him for the personal impact this has caused."

The situation was a result of inadequate gambler notification systems, "As recognized by Justice Murphy in his judgment, the CBA has taken corrective measures to finalize a hardship arrangement with Mr. Harris and has introduced a series of measures intended to address issues associated with problem gambling as well as broader measures to assist customers to manage their credit card expenditure."

Source:
https://www.theguardian.com/australia-news/2018/mar/22/commonwealth-bank-offered-credit-card-increases-to-problem-gambler

 


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11 comments on "Aussie Bank Fined $150,000 for Upping Problem Gambler''s Credit Limit"

 geseco1216/11/2020 14:02:35 GMT
It is important for both parties to evaluate if the loans to play in arcades are feasible, well, both parties have some fault, first the bank for giving money to an additive to the games and losing enough money than they earned, and the player for spending without measuring consequences, well the judges will do their job and decide which is the best way to solve this case, that is why today there is enough verification by banks before making a loan of money to a person.
 dule-vu16/11/2020 22:13:11 GMT
so if did get everything right and did understand everything,now bank need to pay as court say 150 000 aus dollars because of this,but this man still need to pay back them amount that he spent on gambling?so this man again didnt got anything and he still need to back money!its strange decision!would be better for him that instead of this fine,he dont need to back money and all sides would be happy!
 CALICUL18/11/2020 11:44:59 GMT
Aussie bank deserved that fine for violating law and allowing the man to exceed established percentage by Australian state to protect gamblers. It was not necessary to do this thing because that man had to eat, pay bills etc...
 dule-vu20/11/2020 00:01:01 GMT
for me best situation for all would be that court make decision where bank need to pay fine,but this mean dont have to put back money to bank,because on this way he will back money to them and they will pay fine and lose much less,because he made debt to this bank!
ofcourse everybody have own fault in this,so they need to share it,but they could do on some other way!
 antonis32120/11/2020 04:52:13 GMT
Strange case, if itwas a gambling operator or room , live or online , I would understand it , but a bank ?? ...hmmm . Anway , the law enforces some things that the bank didn't do right , so that's why now it has to pay this fine , as it seems it tried to win more koney from this worker , who was gambling carelessly . But I would say he has the most responsililities on how to spend his money or handle his gamble addiction or situation ,not the bank .
 CALICUL21/11/2020 16:44:37 GMT
Decisions are made at the government level, because online poker has terrorized certain politicians who have chosen ''to destroy'' this industry... when they have banned many countries from playing permanently ( USA which returns with different states ), or from playing with external players ( it was allowed only at the national level ).
 antonis32122/11/2020 06:46:24 GMT
So , he informed the bank of his gambling problem , so th bank ought to protect him by enforcing a limit on his spendings on his creditcard , but instead it proposed increasedments in spendings and new limits , so it is now credied to be responsible for his breach of spending limits and gambling addict behavior . A little too far imo , if it was the gambling operator I would have agreed up to a certain point , now no . Even in the scenario of a gambling operator or platform ,, we would examine the facts and everyone's actions , the gambler has his responsibilities how he bets ,
 dule-vu23/11/2020 10:24:08 GMT
yeah,they done everything to allow him to gamble,but both will pay it!bank to goverment because of their move and this man,that will need to back money to bank!ofcourse he did spend this money and thats ok,but bank will not lose much with this fine,because they will get almost whole amount from him,instead that he dont have to back this money and that they pay fine!
 CALICUL24/11/2020 18:30:14 GMT
In Romania, if i had a limit on gambling deposits, it would be very good. Other countries are starting to take action. United Kingdom, Australia etc ... I think they are afraid because is possible to have a big series of complaints like in the past.
 geseco1225/11/2020 02:44:16 GMT
In some countries these rules exist that they have to watch over their clients, well the bank is responsible, since it is a current rule and they should comply with it, because if it were not so, everyone would go bankrupt and there would be no controls, even if the money is of him and he decides to spend it on anything, the bank should take measures so that his family is not affected.
 dule-vu25/11/2020 13:22:15 GMT
ofcourse this is not normal situation,especially when we know that he told them that he have problems with gambling and that still gave him big amounts to spend without asking him,so this is something that normal goverment want to stop!but because of this fine,he shouldnt pay whole amount!

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