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ANZ caves on ‘fees for no service’ issue

ANZ caves on ‘fees for no service’ issue

James Mitchell
— 1 minute read

The major bank has complied with the court enforceable undertaking entered into with ASIC in March 2018 regarding fees for no service.

ANZ entered an enforceable undertaking with ASIC last year for failing to fairly compensate customers for services they paid for and never received. An ASIC investigation found that the major bank failed to provide documented annual reviews to more than 10,000 Prime Access customers in the period from 2006 to 2013.

On 31 May 2019, ASIC received an audited attestation from ANZ signed by Michael Norfolk, managing director of private banking and advice, and an independent expert report from Ernst & Young (EY).

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ASIC said it is satisfied with the audited attestation and the independent expert report.

“Compliance with the obligations under the CEU is now finalised, save for the payment of some remaining refunds due to clients, to be completed by mid-July 2019,” the regulator said. 

ANZ has attested to the following as required under the CEU:

1. the changes to ANZ’s systems, controls and processes that have been implemented in response to the fees for no service conduct

2. subject to (c), that ANZ has provided documented annual reviews to Prime Access customers who were entitled to such reviews in the period from January 2014 to March 2018

3. in the 1,410 instances where documented annual reviews were found to have not been provided, ANZ is in the process of refunding those customers (with remediation expected to be complete by mid-July 2019)

4. that ANZ now has systems, controls and processes that seek to ensure documented annual reviews are being provided, and that instances of non-delivery are detected and remediated

ANZ recently announced it will no longer offer the Prime Access service to new customers and will phase it out for current customers over the next 18 months. ASIC stated that it will monitor the phasing out of Prime Access.

ANZ confirmed that financial planners are talking to current Prime Access customers during their annual review to understand their ongoing needs and how a new advice model could best work for them. ANZ said the new service will also provide customers with greater choice of regular financial reviews.

Prime Access was first offered in 2003. ANZ started a fee reimbursement approach in 2015 for customers that did not receive an annual documented review as part of their Prime Access package between 2006 and 2013. The Australian Securities and Investments Commission accepted this approach as part of an enforceable undertaking in 2018.

 

ANZ caves on ‘fees for no service’ issue
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