The Federal Court has made a declaration that Commonwealth Bank made representations to customers on 12,119 occasions about interest charges that were false or misleading and that its conduct was likely to mislead or deceive.

ASIC took the bank to court last November alleging that between November 2014 and March 2018 CBA made representations to business overdraft account holders about the interest rate being charged, when the rate actually charged was higher.

The bank admitted the facts in ASIC’s statement. ASIC said the total amount of overcharged interest was A$2.2 million

The bank said the overcharging was the result of a system error, while ASIC said the bank’s conduct resulted from inadequate systems and processes.

The court ruled that CBA breached the ASIC Act on each occasion and, in doing so, breached its general obligation as a financial services licensee to comply with financial services law.

The court ordered the parties to file relevant documents, including evidence, and ordered ASIC to file a submission “as to penalty and other relief ” by the end of March. A final hearing has been set for April 6.

ASIC noted in a statement that CBA has set up a remediation program to compensate customers impacted in this case.

The regulator has previously penalised CBA $5 million over failings in the administration of its AgriAdvantage Plus Package. The failings included overcharging interest.