ASIC has commenced civil penalty proceedings in the Federal Court against ANZ “for failing to provide certain benefits it had agreed to give customers with offset transaction accounts or a ‘Breakfree’ package.”
ASIC claims that between the mid-1990s and September 2021, ANZ failed to provide certain benefits, which included fee waivers and interest rate discounts, to approximately 580,000 customer accounts which has resulted in ANZ having to remediate nearly A$200 million to impacted customers.
ASIC Deputy Chair Sarah Court said in a statement, “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, ASIC said, marks the final investigation by ASIC arising from matters considered by the Financial Services Royal Commission.
“A constant theme of those investigations has been the failure of large financial services entities to honour agreements with customers and to ensure proper processes and systems are in place to prevent widespread compliance failures. ASIC will continue to take enforcement action in relation to misconduct of this nature,” Court said
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.
ASIC also alleges that ANZ’s offset customers were entitled to interest rate reductions on eligible home and commercial loans but they were also not always provided to customers.
ANZ has admitted the contraventions and said it “apologises to its customers who have been impacted.”
ANZ said it does not intend to contest the proceeding and will join ASIC in submitting a proposed penalty of $25 million to the Court.