ANZ could pay another hefty price for its faltering technology and processing systems after ASIC said it was suing the bank for alleged unlawful fee slugging that has raked in tens of millions in revenue since 2016.
ASIC alleges that between May 2016 and November 2018, around 165,750 ANZ customers were inappropriately charged cash advance fees and interest for credit card withdrawals.
It is alleged that the fees and interest were charged because ANZ’s banking platforms – including the ANZ app and the internet platform – were displaying incorrect account balances.
ASIC also alleges that ANZ has not yet fixed the technical problem and that customers continue to be affected.
“We are concerned that, over a long period of time, ANZ overstated the available funds and balances on credit card accounts, and nonetheless charged fees and interest to customers who relied on this information when making withdrawals,” said ASIC deputy chair Sarah Court.
“In some cases, single customers were charged thousands of dollars in fees while the average cash advance fees and interest charged per affected account was A$47.
“This alleged misconduct is the result of system errors within ANZ and a lack of effort to comprehensively fix these issues.
“We say that ANZ has been aware of the unlawful charging since at least 2018 and the problem is still occurring today.”
ANZ has stumped up more than $10 million to compensate 165,750 customers affected by the systems failure before November 2018.
However, ASIC is seeking compensation for customers affected by the problem in the last four years and pecuniary penalties because of the bank’s alleged failure to do all things necessary to ensure its credit activities were conducted “efficiently, honestly and fairly”.
ANZ said it was considering the ASIC legal claim, but did not comment on whether it would defend the Federal Court action.
“ASIC is alleging historic and ongoing contraventions of the misleading or deceptive conduct provisions of the ASIC Act and of the general conduct obligations owed by credit licensees under the Credit Act, relating to the display of recently deposited funds in customer accounts,” the bank said in a filing to the ASX.
“ANZ is considering the matters raised by ASIC in its concise statement.
“ANZ will not be providing further comment given the matter is now before the Court.”
Faltering technology has created a string of headaches for ANZ’s senior management in the last two years.
The bank’s share of the Australian home loan market has fallen significantly over the last 18 months as its glitch-prone mortgage broker platform caused a blowout in loan assessment times.