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Big 4 served with suit over $200m failure
ANZ has been slapped with a lawsuit for allegedly misleading half a million customers in a $200 million failure.
Big 4 served with suit over $200m failure
ANZ has been slapped with a lawsuit for allegedly misleading half a million customers in a $200 million failure.
ASIC has commenced civil penalty proceedings in the Federal Court against Australia and New Zealand Banking Group for failing to provide certain benefits it had agreed to give customers with offset transaction accounts.
According to the corporate regulator, between the mid-1990s and September 2021, ANZ failed to provide fee waivers and interest rate discounts to 580,447 customer accounts, which resulted in the big four having to remediate nearly $200 million to impacted customers.
Commenting on the charges, deputy chair Sarah Court said in a statement on Thursday (9 December): “ANZ’s conduct was long standing and impacted over half a million customers.
“These customers were entitled to receive the benefits they signed up for and in many instances paid for. This case is yet another example of a widespread system failure by a major bank impacting thousands of customers.”
This matter marked the final investigation by ASIC arising from matters considered by the royal commission, a constant theme of which has been the failure of large financial services entities to honour customer agreements.
“ASIC will continue to take enforcement action in relation to misconduct of this nature,” Ms Court confirmed.
ANZ’s Breakfree package, introduced in 2003, offered fee waivers, interest rate discounts on eligible ANZ products, such as home loans, credit cards and transaction accounts, and other benefits in exchange for paying an annual fee.
ASIC alleges that these entitlements were not always provided to customers.
Moreover, according to the corporate regulator, ANZ’s offset customers were entitled to interest rate reductions on eligible home and commercial loans, which were not always provided.
ANZ has admitted to making false or misleading representations, also noting that its bank’s systems and processes were not capable of delivering those benefits consistently and that it breached its obligations as a financial services and credit licensee to provide services honestly, efficiently and fairly.
ASIC is now seeking declarations, pecuniary penalties and other orders against ANZ. ASIC and ANZ will submit to the court that a penalty of $25 million is appropriate.
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