- Australia’s market watchdog launches civil penalty proceedings against Big Four bank ANZ (ANZ) for allegedly misleading customers about their credit card balances
- ASIC says between May 2016 and November 2018, some 165,750 ANZ customers were charged unnecessary fees on their credit card accounts
- What’s more, the regulator alleges the issue is still occurring today and there has been a “lack of effort” from ANZ to address the problem
- The bank has already paid back over $10 million to customers who were affected up until November 17, 2018, but ASIC is now seeking remediation for those impacted after this date
- ANZ acknowledged the legal proceedings but said it would make no further comments on the matter which was now before the court
Australia’s market watchdog has launched civil penalty proceedings against Big Four bank ANZ (ANZ) for allegedly misleading customers about their credit card balances.
The Australian Securities and Investments Commission (ASIC) said between May 2016 and November 2018, some 165,750 ANZ customers were charged unnecessary fees on their credit card accounts based on incorrect account balances in ANZ’s systems.
The bank has already paid back over $10 million to customers who were affected up until November 17, 2018, but ASIC is now claiming the problem continued beyond this date.
ASIC Deputy Chair Sarah Court alleged that over a “long period of time”, ANZ overstated the available funds and balances on credit card accounts and charged fees and interest to customers using this information when making withdrawals.
“In some cases, single customers were charged thousands of dollars in fees, while the average cash advance fees and interest charged per affected account was $47,” Ms Court said.
She said ANZ’s alleged misconduct was not only based on the result of system errors within the bank but also on a “lack of effort” from the bank to address and fix the issues.
“We say that ANZ has been aware of the unlawful charging since at least 2018 and the problem is still occurring today,” concluded Ms Court.
ASIC is now seeking court orders to make ANZ pay back customers who were wrongly charged from November 2018 and beyond.
“ASIC also seeks orders that require ANZ to implement a system change so that where a payment is made to a customer’s credit card account, it is not included in their funds or balance until that amount is cleared by ANZ and available to use without adverse consequences,” the regulator said.
ANZ acknowledged the civil proceedings and said it was “considering the matters raised by ASIC”.
“ASIC’s claim relates to a particular situation where funds are deposited to put a credit card account into a credit balance, and a cash advance is subsequently made on the account drawing down on the credit balance before the deposit is processed,” the bank said in a statement.
ANZ said it would make no further comments on the matter which was now before the court.