ASIC has announced it has commenced civil penalty proceedings in the Federal Court against Australia and New Zealand Banking Group Ltd (ANZ), in which ANZ has admitted 24 contraventions of the responsible lending provisions of the National Credit Act 2009 for car loans approved by Esanda from three broker businesses.
UPDATE: Federal Court reasons for penalty.
ASIC alleges that between 25 July 2013 and 12 May 2015, ANZ failed to meet its responsible lending obligations by approving loans without having first taken reasonable steps to verify the consumer’s financial situation and failing to verify the consumer’s income relying only on payslips included in 12 car loan applications, in circumstances where it knew that payslips could be easily falsified and it had reason to doubt the reliability of information from the particular broker businesses.
ASIC says it and ANZ have filed a Statement of Agreed Facts and Admissions in the Federal Court. They will make joint submissions that an appropriate penalty to be paid by ANZ is $5 million. The penalty amount payable by ANZ will be determined by the Court. ASIC is also claiming costs of $120,000. The first hearing will be on 2 February 2018.
In addition ASIC says ANZ will remediate approximately 320 car loan customers for loans taken out through three broker businesses from 2013 to 2015, totalling around $5 million. The loans are likely to have been affected by fraud.
ANZ will:
- offer eligible customers the option of entering into a new loan on more favourable terms than the existing loan;
- provide refunds to some customers who have paid their loan out or had the car repossessed;
- remove any default listings resulting from the relevant loan.
