ASIC has commenced civil penalty proceedings in the Federal Court against Australia and New Zealand Banking Group Ltd (ANZ) for allegedly misleading its customers as to the available funds and balances in their credit card accounts.

ASIC alleges that between May 2016 and November 2018, around 165,750 ANZ customers were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts based on an incorrect account balance, including on the ANZ website, ANZ App and at ATMs. ASIC also alleges that ANZ has not adequately fixed the problem and that customers continue to be affected.

ASIC Deputy Chair Sarah Court said ‘We are concerned that, over a long period of time, ANZ overstated the available funds and balances on credit card accounts, and nonetheless charged fees and interest to customers who relied on this information when making withdrawals.

‘In some cases, single customers were charged thousands of dollars in fees while the average cash advance fees and interest charged per affected account was $47.

‘This alleged misconduct is the result of system errors within ANZ and a lack of effort to comprehensively fix these issues. We say that ANZ has been aware of the unlawful charging since at least 2018 and the problem is still occurring today,’ concluded Ms Court.

ASIC claims that ANZ: 

  • between May 2016 and September 2021, made false or misleading representations that where a customer’s ‘Current Balance’ and ‘Available Funds’ were in credit, the Current Balance would be available to the customer for withdrawal without incurring fees or interest;
  • since 24 September 2021, engaged in conduct that is misleading or deceptive by representing that where the amount of a customer’s ‘Balance’ or ‘Funds’ was in credit, the Balance would be available to the customer for withdrawal without incurring fees or interest; and
  • has failed to do all things necessary to ensure the credit activities authorised by its Australian Credit Licence are engaged in efficiently, honestly and fairly.

While ANZ has remediated over $10 million to customers who were affected up until 17 November 2018, the problem is continuing. ASIC is seeking orders from the Court that customers who have been wrongly charged since 2018 also be remediated.

ASIC is seeking declarations and pecuniary penalties from the Court. ASIC also seeks orders that require ANZ to implement a system change so that where a payment is made to a customer’s credit card account, it is not included in their funds or balance until that amount is cleared by ANZ and available to use without adverse consequences.

The date for the first case management hearing is yet to be scheduled by the Court.

Background 

As at the end of October 2021, ANZ had remediated 220,761 credit card accounts which were wrongly charged fees or interest in the period 1 July 2015 to 17 November 2018.

Originally published by ASIC