ANZ to pay $29m for breach of obligations
The country’s biggest bank, ANZ, will pay customers a further $29.4 million after admitting a breach of its responsible lending obligations in 2015 and 2016.
Between June 2015 and May 2016, ANZ had an issue with a loan calculator used by frontline staff, which meant some interest was left out when calculating their repayments or loan term.
The Commerce Commission found the loan variation information affected more than 100,000 customers and ANZ failed to take the necessary care required of a responsible lender. This settlement with the competition watchdog is the largest the commission has had with a single bank.
ANZ have previously paid affected customers about $6m as a result of the error.
The commission was also seeking a High Court declaration that the bank’s conduct breached the Credit Contracts and Consumer Finance Act (CCCF Act).
Under the CCCF Act, every lender must exercise the care, diligence and skill of a responsible lender in all initial and subsequent dealings with borrowers.
The issue affected personal and home loan customers who agreed with the bank to vary their loans. ANZ self-reported the issue to the commission in 2017.
Customers covered by this settlement will be contacted directly by ANZ by physical letter.
ANZ retail and business banking managing director Ben Kelleher said there were around 86,000 accounts affected that
Customers covered by this settlement will be contacted directly by ANZ by physical letter.
would receive the further $29m payment.
‘‘In 2018, we wrote to impacted customers, and if customers were underpaying because of the problem, we gave them a credit, so customers paid less than they’d agreed to under their loan agreement,’’ Kelleher said. ‘‘ANZ is sorry this issue happened. We worked quickly to fix the problem, owned up to it, and we’ve made sure no customers are disadvantaged. We’ll begin to make the further payments to relevant customers over coming months.’’
Lenders entering into or varying consumer credit contracts after June 6, 2015 are required to comply with the lender responsibility principles, as set out in the CCCF Act.
The lender responsibility principles impose obligations on lenders to exercise the care, diligence, and skill of a responsible lender at all times, including when advertising, before entering into a loan, and during all subsequent dealings with borrowers and guarantors.
These principles apply not only to consumer loans, but also to credit-related insurance contracts, guarantees and buy-back transactions.
Lenders must act carefully and responsibly at all times and treat borrowers reasonably and with respect.