- The corporate regulator takes legal action against ANZ Bank (ANZ) for failing to pass on financial benefits to more than 500,000 customers over a two-decade period
- According to ASIC, ANZ failed to deliver certain benefits, including fee waivers and interest rate savings, to about 580,447 client accounts
- This activity resulted in ANZ having to compensate harmed consumers for over $200 million
- ANZ has confessed to the wrongdoings and apologised to those who have been
- ANZ shares rounded of the day in the red, falling 0.18 per cent to $27.61
The corporate regulator has taken legal action against ANZ Bank (ANZ) for failing to pass on financial benefits to more than 500,000 customers over a two-decade period.
According to ASIC, ANZ failed to deliver certain benefits, including fee waivers and interest rate savings, to about 580,447 client accounts between the mid-1990s and September 2021, resulting in ANZ having to compensate harmed consumers for over $200 million.
ANZ has confessed to the wrongdoings and apologised to those who have been affected. The bank will not defend the process and will join ASIC in filing a $25 million recommended penalty to the Court.
The news comes after ASIC sued ANZ over its ‘introducer program’ for home loan referrals in late November and was followed by a class-action lawsuit by firm Phi Finney McDonald last week, alleging customers were wrongly charged credit card fees.
Since a Royal Commission probe in 2018, which uncovered numerous flaws in the industry and forced corporations and authorities to take response, scrutiny of Australian lenders and financial institutions has increased dramatically. This matter marks the final investigation by ASIC arising from the commission.
“ANZ’s conduct was long standing and impacted over half a million customers,” ASIC Deputy Chair Sarah Court said.
“These customers were entitled to receive the benefits they signed up for and in many instances paid for. This case is yet another example of a widespread system failure by a major bank impacting thousands of customers.”
Ms Court said a constant theme of the Royal Commission was the “failure of large financial services entities to honour agreements with customers and to ensure proper processes and systems are in place to prevent widespread compliance failures”.
“ASIC will continue to take enforcement action in relation to misconduct of this nature,” she said.
In exchange for an annual fee, ANZ’s ‘Breakfree’ package offered fee exemptions, interest rate savings on certain ANZ products including house loans, credit cards, and transaction accounts, and other incentives. Customers were not always given these privileges, according to ASIC.
ASIC further claims that ANZ’s offset clients were entitled to interest rate reductions on qualified residential and business loans, but that these reductions were not always given.
ANZ acknowledged the proceedings, noting that while ASIC has not alleged deliberate conduct, it said its conduct “fell short of expectations” and will cooperate with the investigation.
ANZ shares rounded of the day in the red, falling 0.18 per cent to $27.61.