ASIC alleged that 165,750 ANZ clients have been charged advance fees and interest for withdrawing or transferring money from their credit card accounts, between May 2016 and November 2018
ANZ headquarter in Docklands, Melbourne. (Credit: Donaldytong/Wikipedia.)
Australian Securities and Investments Commission (ASIC) has commenced a civil penalty lawsuit against Australia and New Zealand Banking Group (ANZ) for allegedly misleading its customers over their credit card accounts.
According to the case filed with the Australian Federal Court, the bank has been misleading its credit card customers between May 2016 and November 2018.
ASIC alleged that 165,750 ANZ clients have been charged advance fees and interest for withdrawing or transferring money from their credit card accounts,
The Australian securities watchdog also alleged that ANZ has failed to adequately fix the problem, allowing the customers to continue to be affected.
ASIC Deputy Chair Sarah Court said: “We are concerned that, over a long period of time, ANZ overstated the available funds and balances on credit card accounts, and nonetheless charged fees and interest to customers who relied on this information when making withdrawals.
“In some cases, single customers were charged thousands of dollars in fees while the average cash advance fees and interest charged per affected account was $47.
“This alleged misconduct is the result of system errors within ANZ and a lack of effort to comprehensively fix these issues. We say that ANZ has been aware of the unlawful charging since at least 2018 and the problem is still occurring today.”
Since September last year, ANZ has been engaged in misleading conduct, where the amount of a customer’s ‘Balance’ or ‘Funds’ was represented in credit, and has failed to take necessary steps.
In December last year, ASIC filed a civil penalty lawsuit against ANZ over misleading over 580,447 customers, under its ‘Breakfree’ package.
The bank has failed to provide certain benefits, including fee waivers and interest rate discounts to the customers, between the mid-1990s and September this year.
ANZ was ordered to pay nearly A$200m ($143m) to impacted customers in remediation. The bank has already remediated more than $10m to affected customers, until November 2018.
ASIC is seeking orders from the Court to remediate customers who have been wrongly charged since 2018, along with declarations and pecuniary penalties.
Furthermore, the agency seeks orders that require ANZ to implement a system change, where a payment is made to a customer’s credit card account.