ANZ has confirmed that the Australian Securities and Investments Commission (ASIC) has initiated a civil penalty proceeding against it. The case concerns benefits such as fee waivers and discounts not being applied under ANZ's Breakfree package, alongside system errors affecting offset account calculations.
The proceeding is primarily linked to issues highlighted during an ANZ case study at the 2018 Royal Commission into Misconduct in the Banking Superannuation and Financial Services Industry.
ASIC alleges breaches of misleading or deceptive conduct provisions of the ASIC Act and general obligations under the Corporations Act by financial services licensees. These breaches include "not all applicable benefits being applied under the Breakfree package," which covers home loan, transaction account, and credit card fee waivers, home loan interest rate discounts, and optional additional benefits like insurance premium discounts. 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 improved its systems to address these issues and is conducting remediation programs. The program for offset account issues is complete. Most payments related to Breakfree package issues have been made, with remaining payments expected in 2022. Remediation for optional additional benefits will continue through 2022-2023.
ANZ and ASIC have filed a statement of agreed facts with the Court. ANZ admitted to contraventions and apologized to affected customers. It does not plan to contest the proceeding and will propose a $25 million penalty jointly with ASIC to the Court.
The remediation efforts and proposed penalty are covered by existing provisions. Although ASIC has not alleged deliberate misconduct, ANZ acknowledges its conduct did not meet expectations and has cooperated fully with ASIC's investigation.
ANZ stated that due to ongoing court proceedings, no further comments will be made.