Good Evening everyone, we will be talking about a program coding error that led one of Australia’s biggest bank in a bad book.
The program coding error is a technical glitch that was not detected for more than four years which ultimately resulted in hundreds of thousands of customers for overdrafts with their rental expenses then being set at zero.
This allowed customers to take more money out of their account then they had, with interest charged on the negative balance, and happens generally when the interest rate is set at mid-teens.
This overdraft issue was discovered in the year 2015 in September, when the Consumer Action Legal Centre showed some concerns towards CBA’S overdraft application process.
It was an error which meant that from the year 2011 till 2015 more than 9000 customers were granted an overdraft when their applications should have been refused by the bank because they could not afford it.
As a result of error between 2011 and 2015 CBA failed to take into consideration the declared housing and living expenses of some consumers. And therefore Australia’s biggest bank has paid $180,000 in fines for a programming error that led to almost more than 9000 overdrafts being incorrectly approved.
And to deal with such misconducts in banking, in superannuation and in financial services industry the royal commission came into effect last year in December.
It can be said that CBA failed to take what the society considers today to be the reasonable steps.