For a 12-year period, ANZ had been charging a number of fees to personal and business customers that related to period payments.

These fees included fees charged for periodic payments that could not be made due to insufficient funds in a customer’s account (non-payment fees) and transaction fees charged for successful period payments (transaction fees).

A statement from the corporate regulator said that under the relevant terms and conditions, ANZ “was not entitled to charge non-payment fees or transaction fees to customers where the periodic payment was made between two accounts held in the same customer name (same-name fees)”, but had done so between August 2003 and September 2015.

The Australian Securities and Investments Commission (ASIC) said ANZ even admitted to knowing there was a risk it was not contractually entitled to charge same-name fees to non-loan retail and commercial customers from July 2011 after it received communications from its external lawyers.

Yet the bank continued to charge fees for same-name transfers until September 2015.

The Federal Court declared that by charging same-name fees to affected customers between 26 July 2013 and 24 September 2015, when ANZ lacked contractual entitlement to charge those fees and when ANZ knew there was a risk it was not contractually entitled to charge those fees, it had engaged in unconscionable conduct on 327,895 occasions in contravention of the Australian Securities and Investments Commission Act 2001.

It had also breached its general obligation to comply with the financial services laws contained in the Corporations Act 2001, as well as failed “to do all things necessary to ensure that the financial services covered by ANZ’s Australian Financial Services Licence were provided efficiently, honestly and fairly”.

By not making remediation payments to affected customers, ANZ also admitted to, and was found by the court to have engaged in, unconscionable conduct, breached its general obligation to comply with the financial services laws, failed to do all things necessary to ensure that the financial services covered by the bank’s financial services licence were provided efficiently, honestly and fairly.

According to ASIC deputy chair Daniel Crennan QC, the outcome and $10 million penalty “is a strong deterrent message”.

He said it reflects ASIC’s position that ANZ “lacked contractual entitlement to charge these particular fees”.