Corporate watchdog Asic to sue ANZ over alleged transfer fee rip-off
The corporate regulator is to launch legal action against ANZ over an alleged fee rip-off that could result in the bank being forced to pay a penalty running into the hundreds of millions of dollars.
An Australian Securities and Investments Commission spokesman said on Thursday the regulator was “intending to issue proceedings in the federal court against ANZ today” over the alleged misconduct, which relates to the bank charging fees to customers who moved money between their own accounts.
ANZ told the stock exchange it understood that “Asic will seek pecuniary penalties in respect of 1.3m occasions where the fees were applied”.
It is believed Asic will accuse the bank of breaches of the law including misleading and deceptive conduct, unconscionable conduct and making false or misleading representations to customers.
These breaches attract maximum penalties of between $1.7m and $2.1m per contravention, implying a total penalty for the bank of in excess of $2tn if Asic succeeds.
However, a court is unlikely to apply the maximum possible penalty, meaning a total running into the tens or hundreds of millions is far more likely.
Asic is also expected to accuse ANZ of breaching its core obligations under its financial services licences to deal with customers “efficiently, honestly and fairly”.
However, it will be unable to ask the court for a fine to be imposed for this alleged breach because the fees were charged before changes to the law in February that beefed up penalties.
“While ANZ is still considering the matters raised by Asic, ANZ categorically denies any deliberate wrongdoing and intends to vigorously defend any such allegation,” the bank told the ASX.
Before February 2016, ANZ charged customers a fee to set up regular payments from one of their accounts to another. It also charged customers a dishonour fee when there was not enough money in their account to make the scheduled payment.
The periodical payment fees were also part of a landmark class action lawsuit over bank fees run by law firm Maurice Blackburn in which it was alleged they were not allowed by ANZ’s contracts with its customers.
While the class action was largely unsuccessful, the periodical payment fees were carved out and in December ANZ agreed to pay $1.5m to settle the case.
Separately, in September 2016 ANZ struck a deal with Asic to pay almost 400,000 customers $28.8m to compensate them for paying the fees.
At the time, ANZ said it had “proactively reported this matter to Asic”.
On Thursday morning the bank told the market the compensation figure had now blown out to $50m.