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The words Final Chapter typed out on typewriter

Finally! ASIC’s RC actions come to an end

By Mike Taylor9 December 2021

In what the Australian Securities and Investments Commission (ASIC) has declared as the  final investigation emanating from the Financial Services Royal Commission the regulator has commenced civil penalty proceedings in the Federal Court against ANZ Group.

At the same time, the regulator noted that “a constant theme of those investigations has been the failure of large financial services entities to honour agreements with customers to ensure proper processes and systems are in place to prevent widespread compliance failures.

With respect to ANZ, ASIC is alleging the big banking group failed to provide certain benefits it had agreed to give customers with offset transaction accounts or a “Breakfree” package.

“ASIC claims that between the mid-1990s and September 2021, ANZ failed to provide certain benefits, which included fee waivers and interest rate discounts, to approximately 580,447 customer accounts which has resulted in ANZ having to remediate nearly $200 million to impacted customers,” its announcement said.

ASIC deputy chair, Sarah Court said the bank’s conduct had been long-standing and impacted over half a million customers.

“These customers were entitled to receive the benefits they signed up for and in many instances paid for. This case is yet another example of a widespread system failure by a major bank impacting thousands of customers,” she said.

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. ASIC alleges that these entitlements were not always provided to customers.

ASIC also alleges that ANZ’s offset customers were entitled to interest rate reductions on eligible home and commercial loans but they were also not always provided to customers.

ANZ admits that it made false or misleading representations to customers that it had systems and processes in place that were adequate to provide customer account benefits. ANZ further admits that the bank’s systems and processes were not capable of delivering those benefits consistently and that it breached its obligations as a financial services and credit licensee to provide services honestly, efficiently and fairly.

ANZ has issued a statement to the Australian Securities Exchange acknowledging the ASIC action noting that it has admitted the contraventions and apologises to its customers.

It noted that ASIC was proposing a penalty of $25 million to the court.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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