ASIC sues major bank

by Madison Utley29 Jul 2019

The Australian Securities and Investments Commission (ASIC) is suing a major Australian bank for “misrepresentations and unconscionable conduct” alleged to have taken place between 2003 and 2016.

ANZ has been accused of unlawfully charging fees on at least 1,340,087 occasions over the course of the 13-year period.

According to the regulator, ANZ first became aware that it might not be entitled to charge the fees in 2011, but did not alert ASIC to the possible issue until 2014, did not inform affected customers until 2015, and did not address the problem within its own system until 2016.  

In 2018, ASIC commenced an investigation into the matter after being alerted that the information ANZ had provided in 2014 was incomplete. Subsequently, ASIC alleged that ANZ breached both the Corporations Act and the ASIC Act.

The regulator cited ANZ's unhurried response to rectifying the issue, and the fact the bank was aware it was “highly unlikely that it would be able to remediate all affected customers” as being core motivators for taking the matter to court.   

Further, ASIC highlighted that ANZ “deliberately” did not make remediation payments to customers who had been charged the fees between August 2003 and December 2007.

The total gross loss to customers from 1 January 2008 to 23 February 2016 is in excess of $50m. The bank has paid approximately $28m in remediation to customers to date.

ANZ has communicated it is “still considering” the matters raised by ASIC, but made it clear it has no intention of acknowledging wrongdoing in a statement released shortly after the regulator announced the commencement of legal proceedings.

“ANZ categorically denies any deliberate wrongdoing and intends to vigorously defend any such allegation,” the statement read.

The bank will not provide any further comment on the situation, given that it is expected to be before the courts.