ASIC to sue ANZ over unlawful transaction charges

The Australian Securities and Investments Commission (ASIC) has commenced civil proceedings against ANZ over account and periodic payment fees after it was alleged to have unlawfully charged customers over a million times. 

The regulator argued ANZ was not entitled to charge fees on certain periodic payments, defined as a debit from an ANZ account which the customer instructed ANZ to make to the account of another person or business. It excluded payments between two accounts in the same name.

ASIC’s argument is that between August 2003 and February 2016, ANZ charged fees on both successful and unsuccessful periodical payments between these accounts of the same name. It also alleged ANZ was first made aware of the problem in 2011 but failed to take action until 2014.

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The unlawful charges were alleged to have been made on over 1,340,000 occasions which equated to $50 million in gross lost to customers.

ANZ had already paid $28 million in remediation but this excluded any customers affected prior to 2007.

Finally, ASIC said ANZ breached the Australian Securities and Investments Commission Act 2001 by engaging in misleading or deceptive conduct by continuing to charge the fees, knowing it was highly unlikely it would be able to remediate all affected customers, failing to inform customers of the unlawful charging and deliberately not making payments to customers who were charged between 2003-2007.

Contravention of this act attracts a maximum penalty of $1.7m-$2.1m per contravention.

In reply, ANZ issued a statement: “While ANZ is still considering the matters raised by ASIC, ANZ categorically denies any deliberate wrongdoing and intends to vigorously defend any such allegation.

“These fees were subject of a class action which was settled in December 2018 for $1.5 million, pending court approval. Separately, ANZ has already provided for approximately $50 million in customer remediation payments for this matter of which more than $28 million has already been paid to impacted customers since 2008.”

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