The Federal Court has ordered Australia and New Zealand Banking Group Limited (ANZ) to pay a A$25 million penalty for failing to provide certain benefits it had agreed to give customers with offset transaction accounts or under a "Breakfree" package.
ANZ's Breakfree package, introduced in 2003, offered fee waivers, interest rate discounts on eligible ANZ products such as home loans, credit cards and transaction accounts and other benefits in exchange for paying an annual fee. ANZ's offset customers were entitled to interest rate reductions on eligible home and commercial loans.
The Court found that ANZ failed to provide benefits such as fee waivers and interest rate discounts to approximately 689,000 customer accounts for over 20 years, with customers affected up until September 2021.
The Court found that ANZ had contravened the ASIC Act, the Corporations Act, and the National Consumer Credit Protection Act. In particular, that ANZ made false or misleading representations to certain customers when it represented that it had, and would continue to have, adequate systems and processes to provide them with the contractual benefits they were entitled to.
The Australian Securities & Investments Commission (ASIC) held that having the necessary systems and processes to ensure customers are given the benefits they are promised is not an optional extra, but a requirement.
ANZ made admissions to contravening the law and the parties agreed on a statement of facts.
ANZ's failure would result in over A$211 million in remediation to impacted customers.
ANZ has also been ordered by the Court to publish an adverse publicity order on its website and online banking login page.
Shares of ANZ closed Tuesday's trading at $16.60, up $0.32 or 1.97 percent from the previous close.
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