ANZ to refund $28.8m in fees
ANZ Bank will be refunding $28.8 million to more than 390,000 retail and business accounts after it failed to disclose when certain periodical payments would apply.
ANZ reported the "significant breach" of financial services obligations to the Australian Securities and Investments Commission (ASIC) after it found it was charging fees incorrectly based on its definition of "periodical payment".
A periodical payment are automatic "set-and-forget" fixed amount payments set by the customer, which lets them make regular payments to another account (to make fortnightly rent payments, for example), for which banks can charge a fee, depending on the terms and conditions for the account.
However, in the case of ANZ, the terms and conditions said a periodical payment was a transaction to "another person or business".
"This meant that transactions made by the customer to another account in the customer's own name, whether with ANZ or another financial institution, were not covered by ANZ's own definition of a periodical payment and could not be charged the fees that could otherwise apply to periodical payments," ASIC said.
ANZ found it was charging fees on payments made between accounts held in the customer's name.
The fees included:
- Non-payment fees charged on personal and commercial accounts when the payment did not go ahead due to lack of funds held in the ANZ deposit account; and
- Payment fees charged on commercial accounts when a payment is processed from the ANZ deposit account.
ANZ has now changed its terms and conditions to make clear when periodical payments applied to ANZ deposit account.
It has to pay $25.8 million in fees and an additional $3 million in interest by the end of September.
AUTHOR
Malavika Santhebennur
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
