CBA boss confirms legal tobacco retailers the inadvertent victims of closing accounts of illegal sellers

CBA chief executive Matt Comyn has defended his bank’s decision to cut ties with tobacco retailers despite the potential for legitimate businesses to be caught in the crossfire.

Therapeutic Goods Administration employees conduct a raid on the supply of illegal tobacco products in Melbourne. Picture: Josie Hayden

Commonwealth Bank chief executive Matt Comyn said he regretted that his bank’s crackdown on illicit tobacco had “inadvertently” affected legitimate retailers.

The Australian on Sunday revealed that CBA was “de-banking” a number of tobacco retailers, banning them from using CBA accounts or payment terminals to do business.

But industry figures say the well-intentioned purge risked harming legitimate retailers.

One tobacco shop owner in a town about 40km south of Brisbane received a letter from CBA on October 3 advising him that it was shutting both his business banking and personal accounts by Monday, without cause. He is now banned from opening any new accounts or using any CBA products or services.

The shop owner, who insisted he does not sell illicit tobacco but did not want to speak publicly for fear of being falsely associated with the black market, said the bank refused to explain why.

“I’ve been a loyal CBA customer since 2002 and this is how they treat their customers,” he said.

Mr Comyn confirmed the story while giving evidence at the parliamentary economics committee in Canberra on Tuesday morning, telling MPs that CBA was “substantially going to reduce or restrict the services that we’ll provide (to tobacco retailers), both at a banking and a payments perspective”.

“The article, which is true at a substantive point, is that we’ve made the decision that strategically, we’re not comfortable with the risk profile,” he said.

Mr Comyn said it was possible the bank “may inadvertently identify customers that perhaps aren’t engaged in (selling illicit tobacco)”.

But he said that CBA was “creating a process where customers are able to engage with us”.

“If we make any decisions individually, then that would be a source of regret and we’d be happy to apologise,” he said.

Mr Comyn said the sale of illegal tobacco products was a “real cause for concern” because it had “been linked to crime, facilitating money laundering and also denying the Commonwealth of billions of dollars in excise duty”.

Australia’s financial crimes watchdog last week called on major banks to take “immediate action” to oversee point-of-sale machines used to launder sales from illicit tobacco.

Originally published as CBA boss confirms legal tobacco retailers the inadvertent victims of closing accounts of illegal sellers