Commerce Commission, New Zealand's primary competition regulatory agency, has secured NZD45m for New Zealanders who invested in two funds marketed by ING (NZ) and ANZ National Bank (ANZN). The settlement follows an investigation into alleged breaches of the Fair Trading Act relating to the marketing and promotion of the funds by ING and ANZN.
The investigation was centered on whether representations made by ING and ANZN while promoting and marketing the ING Diversified Yield Fund (DYF) and the ING Regular Income Fund (RIF) violated the Fair Trading Act by misleading the degree of risk of the funds.
The Commission added that as part of the settlement, ING and ANZN have accepted that some of the representations made in marketing material and by ANZ advisers may have breached the Fair Trading Act and they have agreed to make payments totaling NZD45m to affected investors.
The regulator has concluded its investigation, however, it and will not be taking any legal action against individual advisers, advisory services or other parties arising out of its investigation. The settlement with ANZN and ING will be a two stage process.
Mark Berry, chair of Commerce Commission, said: “In the Commission’s view, representations made by ANZN and ING concerning the degree of investment risk in the funds were likely to be misleading, in that the actual risk was understated. We concluded that there was sufficient evidence to commence proceedings against both parties for breaches of the Fair Trading Act.
“Throughout our investigation investors have told us that they would not have invested in these funds if the actual risk had been represented accurately.
“After careful consideration, the Commission believes that this settlement serves the best interests of New Zealand consumers, and the affected investors in particular, who, in many cases, stood to lose part of their life-savings.
“The NZD45m settlement represents the largest compensation sum the Commission has achieved for consumers.”