Australian regulators have begun civil penalty proceedings against Australia and New Zealand Banking Group (ANZ) over its credit card fees.
The Australian Securities & Investments Commission (ASIC) began its case seeking penalties against ANZ in Australia’s Federal Court for allegedly misleading customers over their credit card balances and mischarging fees, according to a statement Monday on the regulator’s website. The regulator alleged that around 166,000 customers were charged cash advance fees and interest on their credit card accounts based on an incorrect account balance. ASIC alleged ANZ hasn’t yet adequately fixed the problem, with customers still affected.
ASIC’s Deputy Chair Sarah Court said that in some cases, customers were charged thousand of dollars in fees, compared with average cash advance fees and interest of A$47 (US$34) on affected accounts.
«System Errors»
«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,» she said in the statement.
In a separate statement, ANZ said it is considering the issues raised by ASIC, but it wouldn’t provide further comment as the matter is now before the court.
ASIC said ANZ has remediated more than A$10 million to 220,761 credit card accounts affected from July 2015 through November 2018, but the problem has continued. The regulator is seeking Court orders for ANZ to remediate customers wrongly charged since 2018, the release said.
Changing Definitions
The court filing stated that ANZ’s internal investigation, which began in March 2018, identified 20 scenarios where credit card and other accounts were affected by the errors, and only began fixes to some of the issues after the internal investigation. However, despite ANZ setting up a working group on the issues and despite senior management’s internal discussions, no steps were taken for a comprehensive resolution, ASIC’s court filing said. ANZ also found three more scenarios between May and October 2021, but those haven’t been resolved, the court filing said.
Instead of fixes, ANZ in 2018 changed the definition of «available funds» and «cash advance fee» in its documentation, ASIC’s court filing alleged. Then in September 2019, the changes were inadvertently reversed in some documents, but not others, creating inconsistencies in customer communication, the court filing alleged.
