ANZ Hit with $15 Million Fine for Misleading Almost 200,000 Customers

<p>The Federal
Court of Australia has imposed a $15 million penalty on the Australia and New
Zealand Banking Group Limited (ANZ) for misleading its customers about the fees
associated with certain credit card accounts. The bank had falsely indicated
that customers could access their "Available Funds" without incurring
any additional fees or interest, a claim that later proved incorrect.</p><p>ANZ Breaches ASIC Act</p><p>The court
determined that <a href="https://www.financemagnates.com/tag/anz/" target="_blank" rel="follow">ANZ </a>violated both the Australian Securities and Investments
Commission (ASIC) Act and the National Consumer Credit Protection Act. The bank
had not accurately processed deposits into the credit card accounts, leading to
an incorrect display of "Available Funds." As a result, customers who
relied on this misleading information were charged unexpected fees and
interest.</p><p>Sarah
Court, the Deputy Chairwoman at <a href="https://www.financemagnates.com/terms/a/asic/">ASIC</a>, emphasized that customers deserve
transparent and accurate account information, including any potential fees.
ANZ's failure to provide this led to inconsistent charges for many of its
customers. The court also criticized ANZ for not promptly rectifying the issue,
stating that such errors should have been addressed much sooner.</p><p>"ASIC will
continue to take action against banks who fail in their duty to act
efficiently, honestly and fairly in dealings with customers," concluded Court.</p><blockquote><p lang="en" dir="ltr">The Federal Court has ordered ANZ pay a $15 million penalty after it admitted to misleading customers about available funds in credit card accounts. Customers who obtained a cash advance based on the misleading information were hit with fees and interest <a href="https://t.co/MMsBjIynAn">https://t.co/MMsBjIynAn</a> <a href="https://t.co/daLF8VNcKb">pic.twitter.com/daLF8VNcKb</a></p>— ASIC Media (@asicmedia) <a href="https://twitter.com/asicmedia/status/1706482743863837131?ref_src=twsrc%5Etfw">September 26, 2023</a></blockquote><p>Three Years of Wrongdoings</p><p>ANZ has
already begun the process of remediation, affecting over 186,000 accounts.
While the average remediation amount stands at around $45 per account, some
customers have been charged thousands of dollars in fees. In addition to the
hefty fine, ANZ will establish a program to repay customers who were wrongly
charged between November 2018 and September 2021.</p><p>The bank
has admitted to these violations and consented to the court's orders. Both
parties have made joint submissions on liability and penalty, and the court's
detailed reasons for the judgment will be published at a later date.</p><p>Beyond the
$15 million fine, ANZ has made remediation <a href="https://www.financemagnates.com/terms/p/payments/">payments</a> totaling over $8.3
million <a href="https://www.financemagnates.com/forex/asic-charges-anz-bank-for-incorrect-fees-and-misrepresentations/" target="_blank" rel="follow">for accounts charged between May 2016 and November 2018</a>. As emphasized
by ASIC in today's (Tuesday's) press release, this serves as a stern
reminder for banks to act efficiently, honestly, and fairly in their dealings
with customers.</p><p>ANZ Is No Stranger to ASIC
Fines</p><p>As with
many large financial institutions, the fine imposed on ANZ is neither the first
nor likely the last the bank will face. In 2020, ANZ <a href="https://www.financemagnates.com/institutional-forex/anz-faces-7-14-million-fine-over-unlawful-charges-to-customers/" target="_blank" rel="follow">was charged a penalty of $7.14
million</a> for engaging in "unconscionable conduct" and
breaching its customer obligations. </p><p>Two years
prior, the bank found itself in legal hot water for issues related <a href="https://www.financemagnates.com/institutional-forex/regulation/asic-hits-anz-with-civil-charges-over-2-5-billion-share-sale/" target="_blank" rel="follow">to a share placement of $2.5
billion in 2015</a>. The case revolved around the non-disclosure of
crucial information to shareholders, specifically concerning the placement of
80.8 million shares at $30.95 each. Notably, 25 million of these shares were
allocated to two of the three joint lead managers, a detail that was not disclosed to
all shareholders. </p><p>Going
further back to 2017, <a href="https://www.financemagnates.com/institutional-forex/regulation/anz-reaches-50m-settlement-asic-following-breach-trading-conduct/" target="_blank" rel="follow">ANZ settled with ASIC over misconduct involving some of
its traders</a>. The settlement required ANZ to pay more than $50 million in
penalties and payments, following a series of trading incidents that dated back
to between 2010 and 2012.</p>

This article was written by Damian Chmiel at www.financemagnates.com.