According to ASIC’s case against the bank, ANZ charged the fees between 2003 and 2015, in relation to periodic payments that could not be paid due to insufficient funds in customer accounts.
The bank also charged transaction fees for successful periodic payments over the same period.
Under the relevant terms and conditions, ANZ was not entitled to charge non-payment fees or transaction fees to customers where the periodic payment was made between two accounts held in the same customer name.
In the course of the case, ANZ admitted that from July 2011, it knew there was a risk it was not contractually entitled to charge the fees, but continued to charge them until September 2015.
The court declared that by charging the fees to the affected customers between July 2013 and September 2015, ANZ engaged in unconscionable conduct on 327,895 occasions, as well as breaching its its general obligation to comply with the financial services laws.
ANZ also admitted it had charged the same type of fees to customers between July 2005 and December 2007 and had not made remediation payments to customers, which constituted two further counts of unconscionable conduct and additional breaches of its licensing obligations.
“The outcome and penalty imposed by the court is a strong deterrent message and reflects ASIC’s position that ANZ lacked contractual entitlement to charge these particular fees. ASIC, through its Office of Enforcement, has held ANZ to account for this conduct,” ASIC deputy chair Daniel Crennan said.
“ASIC acknowledges the cooperative approach taken by ANZ to this litigation, which allowed the matter to be efficiently resolved by the Court. It is in the public interest that parties to regulatory litigation cooperate where possible.”
The court also ordered ANZ to publish a notice on its website and in the Australian Financial Review regarding the court’s findings as well as pay $1 million towards ASIC’s costs.
