ANZ has announced that the Federal Court of Australia has approved its agreement with the Australian Securities Investments Commission (ASIC) to resolve court action concerning benefits not applied under ANZ’s Breakfree package and system errors affecting offset account calculations. This proceeding follows issues highlighted during a 2018 Royal Commission case study into misconduct in the banking, superannuation, and financial services industry.
In a statement filed with the Court, ANZ acknowledged contraventions related to "not all applicable benefits being applied under the Breakfree package," which included fee waivers for home loans, transaction accounts, credit cards, interest rate discounts on home loans, and optional additional benefits like car loan establishment fee waivers. Additionally, there were "system errors affecting the calculation of offset benefits" when customers made payments into their offset accounts on weekends or non-business days.
ANZ has taken steps to enhance its systems and processes to address these issues and is conducting remediation programs. The program for offset account issues is complete. Most payments to customers affected by Breakfree package issues have been completed, with remaining payments expected by early 2023. Remediation for optional additional benefits is targeted for completion over 2022-2023.
Following an announcement on February 14, 2022, ANZ removed the Breakfree package from sale on March 19, 2022, and discontinued it on September 10, 2022.
The Court recognized that ANZ's conduct was not deliberate and noted ANZ's cooperation during ASIC's investigation. However, ANZ admitted that its conduct fell short of expectations and apologized to impacted customers.
As part of the resolution with ASIC, ANZ agreed to pay a $25 million civil penalty along with ASIC's costs. The financial impact of these remediations and penalties are covered by existing provisions.