ASIC takes ANZ to court over wrongly charged credit card accounts

Rick Steves

While the regulator admitted that ANZ has remediated over $10 million to customers who were affected up until 17 November 2018, the issue remains and more customers have been wrongly charged since 2018.

ASIC has taken Australia and New Zealand Banking Group Ltd (ANZ) to Federal Court for allegedly misleading its customers as to the available funds and balances in their credit card accounts.

Australia’s financial watchdog claims that 165,750 ANZ customers were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts based on an incorrect account balance, between May 2016 and November 2018. Moreover, ANZ has not adequately fixed the problem and customers continue to be affected, ASIC stated.

“We are concerned that, over a long period of time, ANZ overstated the available funds and balances on credit card accounts, and nonetheless charged fees and interest to customers who relied on this information when making withdrawals. In some cases, single customers were charged thousands of dollars in fees while the average cash advance fees and interest charged per affected account was $47”, said ASIC Deputy Chair Sarah Court.

“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.”

Issues remain despite $10m in compensation

The Australian Securities and Investment Commission has outlined three claims against ANZ, which are the following:

  • Between May 2016 and September 2021, made false or misleading representations that where a customer’s ‘Current Balance’ and ‘Available Funds’ were in credit, the Current Balance would be available to the customer for withdrawal without incurring fees or interest;
  • Since 24 September 2021, engaged in conduct that is misleading or deceptive by representing that where the amount of a customer’s ‘Balance’ or ‘Funds’ was in credit, the Balance would be available to the customer for withdrawal without incurring fees or interest;
  • and has failed to do all things necessary to ensure the credit activities authorised by its Australian Credit Licence are engaged in efficiently, honestly and fairly.

As at the end of October 2021, ANZ had remediated 220,761 credit card accounts which were wrongly charged fees or interest in the period 1 July 2015 to 17 November 2018.

While the regulator admitted that ANZ has remediated over $10 million to customers who were affected up until 17 November 2018, the issue remains and more customers have been wrongly charged since 2018.

ASIC is seeking the Federal Court to order ANZ to compensate the customers who have been wrongly charged and haven’t been remediated yet.

The financial watchdog is also seeking declarations and pecuniary penalties from the Court and orders that require ANZ to implement a system change so that where a payment is made to a customer’s credit card account, it is not included in their funds or balance until that amount is cleared by ANZ and available to use without adverse consequences.

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