Big bank convinced communications watchdog to delay revealing damaging news
SOURCE:ABC Australia|BY:Michael Atkin and Alison Branley
The Commonwealth Bank persuaded a key regulator to delay announcing it had broken spam laws until after its AGM, new documents reveal.
The Commonwealth Bank (CBA) successfully convinced a key regulator to delay telling the public it had been caught in a massive breach of spam laws, according to new documents released to the ABC.
The Australian Communications and Media Authority (ACMA) found the nation's biggest bank had bombarded customers with 170 million messages with no way of unsubscribing.
But the ABC can reveal the bank requested the regulator push back the announcement until after its 2024 annual general meeting.
ACMA agreed, and its decision meant senior executives, including CEO Matt Comyn, did not have to face embarrassing headlines or hostile questions from shareholders while on stage at the AGM, which was held in October at Adelaide Oval.
Stephen Mayne says the bank had "enormous incentive" to delay the news. (ABC News)
Journalist and shareholder activist Stephen Mayne accused the regulator of doing the bank's bidding.
"The last thing [CBA] would want would be headlines in all the papers that morning of the meeting saying that they were one of the worst corporate spammers that Australia's ever seen,"
he said.
"The bank would have an enormous incentive to try and delay and obfuscate and just get that bad news delayed so they can get through the AGM [so] the whole board of directors and management team isn't exposed in public to the opprobrium."
Michael Sanderson, who was in the audience on the day of the AGM, says he would have asked senior management about the major spam breach. (ABC News)
Michael Sanderson was in the audience in Adelaide.
The veteran of AGMs relishes the opportunity to hold executives to account as a member of the group Bank Reform Now.
He said he would have "100 per cent" asked senior management about the major spam breach.
"If we don't ask questions, who will? The banks have enormous power, and they're able to manipulate the process to suit them,"
Mr Sanderson said.
"AGMs are important from the perspective that it's the only opportunity that bank shareholders have to ask the banks difficult questions."
Regulator emailed draft of media release to CBA
New documents released under Freedom of Information laws reveal the private communications between ACMA and CBA before the major enforcement announcement was made public.
CBA was caught pushing rewards programs, insurance, credit and loan products and bank promotions onto millions of customers, including some who had never consented to them or had removed it.
Documents show as ACMA geared up for the announcement, the regulator emailed a draft media release to the bank saying it planned to make it public six days later, on October 16, 2024, the date of the bank's annual meeting.
That prompted a rapid response from CBA.
ACMA sent the bank a draft of its media release. (ABC News)
A staff member from the bank's legal team called a senior ACMA executive, then followed up with an email requesting that the announcement be pushed back until the day after the AGM.
Despite already having all the information six days in advance, the bank claimed responding to it on the day would create "significant operational challenges".
"Key personnel from management, group legal, investor relations and communications will be in attendance at the AGM in Adelaide," the bank employee wrote.
"That would make it harder to respond to questions from media, investors, customers, employees, and other regulators."
The employee wrote, "whilst of course the release date is a matter for the ACMA", the bank "respectfully" requested it be moved.
The bank "respectfully" requested the date of the release be moved. (ABC News: Keana Naughton)
Early the next morning, ACMA agreed to push back the release date.
The regulator declined to be interviewed.
"ACMA did not consider the request by the Commonwealth Bank regarding the date of the announcement was unreasonable," a spokesperson said in a statement.
"Decisions made regarding the timing of the publication of an enforcement outcome will involve a number of considerations in line with achieving these objectives."
It did not answer questions about why it did not announce the fine in the days leading up to the meeting or who else was consulted before it agreed to the bank's request.
ACMA's emails labelled 'embarrassing'
Mr Mayne said he was shocked by the regulator's decision and labelled the emails "embarrassing".
While he agreed with CBA that having the annual meeting on the same day as the announcement would make it harder for it to manage its response, he believed the bank would have been able to do so comfortably, given its almost unrivalled resources in corporate Australia.
"This was one of the biggest fish that ACMA had ever landed,"
he said.
"This should have been ACMA's finest hour. But for it to then come out later, that they were manipulated by the Commonwealth Bank, reinforced the impression that ACMA overall has not been a very effective regulator."
Former Supreme Court Judge Anthony Whealy also criticised the regulator, saying delaying the announcement was "quite wrong".
Judge Whealy is the chair of the Centre for Public Integrity.
"I think that the true reason for the request from the bank was that they didn't want this matter raised at the AGM, and I think that sticks out a mile," he said.
"[It] strikes me as one more instance of the regulator trying to appease the people they're regulating and to suit their convenience, and that's wrong, completely wrong."
Anthony Whealy says ACMA needs to ensure it is not in a "cozy atmosphere" with companies it oversees. (ABC News: Billy Cooper)
Judge Whealy said ACMA had work to do to ensure there was not a "cosy atmosphere" between the regulator and the companies it oversaw, particularly when making enforcement decisions.
Rachel Waterhouse represents about 6,000 retail investors as the CEO of the Australian Shareholders Association.
She said CBA shareholders were denied a chance to ask why the bank's large compliance team hadn't prevented a significant breach of the spam laws and what was being done to prevent it from happening again.
Rachel Waterhouse questions why the regulator didn't bring forward the announcement prior to the AGM. (ABC News)
Ms Waterhouse questioned why the regulator did not bring forward the announcement prior to the AGM, given it had enough time.
"I do think it would have been better to get the news out there before the AGM, and that meant that the company would have had an opportunity to explain what had happened and what internal controls were being put in place," she said.
She encouraged banks and other major companies to be as transparent as possible with investors, including when things go wrong.
Commonwealth Bank declined to be interviewed.
In a statement, a spokesperson for the bank said it "requested 17 October 2024 because key CBA personnel who were involved in this matter were attending, and active participants in CBA's annual general meeting".
"Their participation in the AGM meant they would not have been available to respond to the public release of the matter by the ACMA, including responding to any questions and inquiries from customers, investors and media outlets," the spokesperson said.
"The timing of the media release was a matter for the ACMA."
CBA confirmed it had also requested three changes to the regulator's media release, one of which corrected the number of emails sent to customers, but not all the changes were made.
Michael Sanderson says it illustrates the control the bank has over the regulator.
The ACMA said it "rejects any assertion that it is not holding companies to account in line with our regulatory purpose and powers".
It said it had issued infringement notices totalling $13.5 million for spam breaches against companies in 2024-25.
The ACMA said it provided draft media releases to companies for "procedural fairness" and it only considers changes "which go to the accuracy of facts".
Mr Sanderson said while he was not surprised by CBA's request to have the announcement moved, he was more concerned that ACMA agreed.
"It illustrates the bank's control over the regulator,"
he said.
"ACMA is a grown-up, it should act as a grown-up and act in the interest of the people, not the interests of CBA."