ANZ has been penalised $25 million by the Federal Court for failing to provide certain benefits it had agreed to give to customers.
This related to benefits such as fee waivers and interest rate discounts which should have been given to 689,000 customers over 20 years who had offset transaction accounts or a ‘Breakfree’ package. Customers were affected until September 2021.
The Breakfree package was introduced in 2003 and offered fee waivers, interest rate discounts on eligible ANZ products in exchange for an annual fee. Meanwhile, those with an offset account were eligible for interest rate reductions on certain home and commercial loans.
The Court found that ANZ had contravened the ASIC Act, the Corporations Act, and the National Consumer Credit Protection Act. In particular, ANZ made false or misleading representations to certain customers when it represented that it had, and would continue to have, adequate systems and processes to provide them with the contractual benefits they were entitled to.
The matter was the final civil case filed following enforcement investigations by the Australian Securities and Investments Commission (ASIC) arising from the Hayne Royal Commission.
ASIC deputy chair, Sarah Court, said: “Having the necessary systems and processes to ensure customers are given the benefits they are promised is not an optional extra, it is a requirement. ANZ is a large financial institution that for many years failed to prioritise and deploy the systems and processes necessary to fulfil its obligations”.
ANZ was ordered by the Court to publish an adverse publicity order on its website and online banking login page.
ANZ’s failure would result in over $211 million in remediation to impacted customers, ASIC said.
The bank made admissions to contravening the law and the parties agreed on a statement of facts.
Funny how it is advisers (i.e. small businesses) who are forced to fund the ASIC levy and future compensation schemes, yet it is the banks and product providers who ASIC keep finding to have continually ripped off customers over decades. So since it was advisers who funded ASIC to take this action, it is only fair any penalty be offset against the ASIC levy.