ANZ has been penalised $15 million after it failed to clear deposits into customers’ credit card accounts, leaving some with fees and charges totalling thousands of dollars.
Between 2016 and 2021, the bank promised certain customers that funds deposited to their credit card accounts and displayed as available could be withdrawn as cash without fees or interest charges.
However, ANZ’s sluggishness in clearing deposits meant customers were told they had more available funds than they did.
Around 186,000 accounts were ultimately charged for withdrawing the difference, despite the ANZ website, app, and ATMs all showing they had sufficient funds available.
That saw ANZ in breach of the ASIC Act and the National Consumer Credit Protection Act, the Federal Court ruled today.
The Court also found that, in taking its time to fix the issue, the bank did not act efficiently, honestly, and fairly.
“Many ANZ customers relied on the account information displayed by the bank and were charged fees that were inconsistent with that information,” Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court said.
“These are errors that we expect a bank to be aware of and fix in a timely manner.
“It should not have taken ANZ several years to address this issue.”
The bank accepted responsibility for the situation and apologised to customers in a statement released today.
It has already made more than $8.3 million of remediation payments to accounts impacted between May 2016 and November 2018 – an average of around $45 per account.
It is also establishing a remediation program to repay customers who were wrongly charged cash advance fees on its ANZ Rewards Travel Adventures Card product between November 2018 and September 2021.
Will this dint ANZ’s hip pocket?
ANZ assured investors today that the $15 million penalty and its legal costs are covered by its existing provisions, meaning it won’t have to dip into its reserves or profits to pay.
The bank’s share price dipped to an intra-day low of $24.89 this morning, marking a 0.36% fall on its previous close.
It has since bounced slightly to trade at $24.99 at the time of writing.
The market was likely unsurprised by today's news, as ASIC announced it had started civil penalty proceedings against the bank relating to the issue in 2022.