Criminal proceedings against Commonwealth Bank of Australia (CBA) over mis-selling of consumer credit insurance have been dismissed, as the legal action commenced after the statute of limitation period.

The Australian Securities and Investments Commission (ASIC), which launched the proceedings in September last year, says the Federal Court made orders last week by consent dismissing the proceedings against the lender and that each party bears its own costs.

The court order came after a ruling last month in a separate matter where the Full Court of the Federal Court found section 12GB(6) of the ASIC Act “imposed a three-year limitation period, including in cases where a corporation was prosecuted.”

“The effect of this decision was to render the charges against the CBA invalid as they were statute barred. The conduct occurred between 2011 and 2015 and the proceedings were filed in 2021,” ASIC says in a statement today.

CBA had pleaded guilty to the 30 criminal charges of making false or misleading representations in the proceedings filed by ASIC last year. The offences relate to CreditCard Plus and Loan Protection policies that were sold as add-on insurance products in branches, by telephone and online.

An ASIC report in 2019 found consumer credit insurance offered extremely poor value, with policyholders getting back an average 11 cents for every dollar paid in premiums for the add-ons to credit cards.