Australia’s market regulator said on Wednesday that Australia and New Zealand Banking Group must pay back A$211 million ($136 million) to customers and pay a fine of A$25 million because it didn’t give agreed-upon benefits to some of its offset accounts.
The Australian Securities and Investments Commission (ASIC) said that the federal court found that the country’s fourth-largest lender failed to give fee waivers and rate discounts to at least 689,000 customer accounts for about 20 years.
The accounts were part of ANZ’s “Breakfree” package, which was introduced in 2003. For an annual fee, the accounts offered fee waivers; lower interest rates on home loans, credit cards, and transaction accounts; and other perks.
ASIC said that ANZ’s offset transaction customers were entitled to lower interest rates on eligible home and business loans, but that these savings were not always passed on.
Related:Â NAB and ANZ, two Australian banks, will raise home loan rates by 50 basis points.
“Having the systems and processes in place to make sure customers get the benefits they were promised is not a nice-to-have, it’s a must,” said Sarah Court, Deputy Chair of ASIC.
“ANZ… failed for a long time to prioritise and use the systems and processes it needed to do its job.”
ANZ said that the offset account problems have been fixed and that most of the payments to customers who had problems with the Breakfree package have been made.
It said that the last payment would be made at the start of 2023.
“ANZ agrees that its behaviour fell short of what was expected and apologises to its customers who were hurt,” the lender said.
ANZ will release its annual results on Thursday. The company stated that the financial impact of the remediation programme and the penalty will be covered by existing provisions.
(1 dollar equals 1.5567 Australian dollars).
