On October 26, 2022, the Federal Court of Australia ordered ANZ to pay a $25 million penalty to the Commonwealth of Australia. This decision, made by Justice O’Callaghan in proceeding VID 734 of 2021, was due to ANZ's conduct concerning its Breakfree package product and offset accounts.
ANZ customers who opted for the Breakfree Package paid an annual fee for benefits such as fee waivers and interest rate discounts on eligible products like home loans and credit cards. The package also offered ancillary benefits on optional products. Offset account holders were entitled to interest reductions on loans linked to their accounts.
The court found that from the mid-1990s until September 22, 2020, for offset customers, and from March 2003 to September 30, 2021, for Breakfree customers, ANZ failed to apply certain benefits according to terms and conditions. Approximately 689,099 customer accounts were affected during this period. ANZ has been making remediation payments totaling about $211.5 million to impacted customers.
The penalty was imposed because between December 10, 2015, and September 30, 2021, ANZ made false or misleading representations regarding its systems and processes for administering these benefits. During this time frame, ANZ made approximately 155,868 false representations affecting around 180,959 customer accounts. Remediation payments amounting to $33.8 million are being processed for these cases.
ANZ cooperated with ASIC during investigations and admitted contraventions while working on remediating affected customers.
This corrective notice is published following the court's orders.
For more information visit ASIC’s media release or see the court’s judgment online.