On Tuesday, the Federal Court ordered ANZ to pay a $15 million penalty after the bank admitted to misleading its customers as to the funds available to them in certain credit card accounts.
The court found that ANZ breached the ASIC Act and the National Consumer Credit Protection Act by falsely indicating that customers could obtain a cash advance from funds shown to be their “Available Funds” without incurring fees and interest.
The court determined that ANZ had not cleared deposits into the credit card accounts and, as a result, the “Available Funds” amount was not correct. It instead showed a larger amount than what could actually be withdrawn without the customer being charged fees or interest.
ASIC noted that customers who obtained a cash advance based on the “Available Funds” amount had been hit with fees and interest by ANZ.
“Customers deserve clear and accurate information about available funds in their accounts and what fees and charges may be applied,” commented Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court.
“Many ANZ customers relied on the account information displayed by the bank and were charged fees that were inconsistent with that information.”
Additionally, the Federal Court found that ANZ did not act efficiently, honestly, and fairly by failing to take timely action to address the problem.
“These are errors that we expect a bank to be aware of and fix in a timely manner. It should not have taken ANZ several years to address this issue,” said Ms Court.
“ASIC will continue to take action against banks who fail in their duty to act efficiently, honestly, and fairly in dealings with customers.”
The bank admitted the contraventions, consented to orders being made and the parties made joint submissions on liability and penalty. The Federal Court is set to publish its written reasons for the judgement at a later date.
In a statement to the ASX, ANZ said that it “accepts responsibility for what has occurred and apologises to its customers, and has addressed the issues that gave rise to the contraventions”.
“ANZ has cooperated with ASIC during this process and has completed its remediation program for the period of the ASIC Act contraventions,” the bank said.
ANZ has provided more than $8.3 million in remediation payments to approximately 186,000 accounts that were charged cash advance fees and interest between May 2016 and November 2018.
ASIC said that, in some cases, single customers were charged thousands of dollars in fees. The average remediation paid was around $45 per affected account.
ANZ will also establish a remediation program to repay customers who were charged a cash advance fee between November 2018 and September 2021.
The bank indicated that the financial impact of the $15 million penalty, as well as ASIC’s costs and the remediation, were covered by existing provisions.
should not ANZ also pay higher refunds to customers for loss of interest / earnings – the banks do this to the customer.
Have to ask why ANZ, CBA, NAB & WBC are still allowed to operate when they are continually and repeatedly being convicted of illegal activities. Any other holder of an AFSL would have been shut down by now. Confirms how much of a pathetic and blunt enforcer ASIC is when it comes to these businesses. Close down the big four and let others into the space who trade ethically and honestly. ANZ should definitely NOT be allowed to take over Suncorp banking so they can expand their illegal activities to more people.
I bet the $15M fine that ASIC cashes in on will be 10x more than what customers were over-charged and ASIC won’t be paying a single cent forward to any customer who was over charged. Very self-serving wouldn’t you agree?