An estimated 150,000 of ING Australia’s clients are to be reimbursed an average of just under $100 each after the discovery of unit pricing errors in their life insurance policies and managed fund investments.
Stephen Sinclair, a spokesman for ING Australia, which is a joint venture between ING Group and ANZ Bank, said that most of the errors — 120,000 of them — were related to “tax provision reconciliation issues”.
“That’s why there was so many of them. If an error relates to a tax provision, we compensate just about everyone in an affected fund at a particular point in time.
“Essentially, these transactions should have been done, in some cases, in a more timely manner.”
ING said the other 30,000 cases were related to financial reconciliation errors, which can be caused by data variations and time variations between data feeds.
ING said the total bill for the errors came to $24.5 million.
The Australian Securities and Investments Commission has already accepted an enforceable undertaking from ING, which first mentioned the existence of the problem to it in 2003.
ASIC and ING both said the emergence of unit pricing errors was related to the merger between ANZ Orchard Investments and ING in 2002.
“The joint venture required the complex integration of entities and numerous products and systems,” ASIC said in a statement released last week.
Sinclair said: “Yes, the problems emerged during [the merger] period. Certain things were identified and investigated. It was clear that these things could have affected investors. We notified the regulators and we set up a dedicated project team. We’ve now improved our processes to make sure we have very tight controls going forward.”
