ANZ marks final ASIC civil case from RC
The corporate regulator has commenced civil penalty proceedings against ANZ for failing to provide customers with promised benefits, and marks the final investigation arising from matters considered by the Financial Services Royal Commission.
The benefits, which included fee waivers and interest rate discounts and were agreed to be granted to customers with offset transaction accounts or a ‘breakfree’ package, included 580,447 customer accounts which had resulted in ANZ having to remediate nearly $200 million to impacted customers.
Australian Securities and Investments Commission (ASIC) deputy chair, Sarah Court, said the case represented “yet another example of a widespread system failure by a major bank impacting thousands of customers”.
ANZ’s conduct was the subject of a case study by the Financial Services Royal Commission and the proceedings marked the final civil case for ASIC arising from the Royal Commission.
The corporate regulator said it would be seeing declarations, pecuniary penalties and other orders against ANZ. Also, ASIC and ANZ would submit to the court that a penalty of $25 million was appropriate.
“This matter marks the final investigation by ASIC arising from matters considered by the Financial Services Royal Commission. A constant theme of those investigations has been 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,” Court said.
“ASIC will continue to take enforcement action in relation to misconduct of this nature.”
ANZ’s breakfree package, introduced in 2003, offered fee waivers, interest rate discounts on eligible ANZ products such as home loans, credit cards and transaction accounts and other benefits in exchange for paying an annual fee.
The regulator alleged that these entitlements were not always provided to customers although ANZ’s offset customers were entitled to interest rate reductions on eligible home and commercial loans.
Following this, ANZ admitted that it had made false or misleading representations to customers.
ANZ further admitted that the bank’s systems and processes were not capable of delivering those benefits consistently and that it breached its obligations as a financial services and credit licensee to provide services honestly, efficiently and fairly.
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