In Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2022] FCA 1251 the Federal Court ordered Australia and New Zealand Banking Group Limited (ANZ) to pay a $25 million penalty for failing to provide certain benefits it had agreed to give customers with offset transaction accounts or under a ‘Breakfree’ package.
The Court found that ANZ had contravened the ASIC Act, the Corporations Act, and the National Consumer Credit Protection Act. In particular, that ANZ made false or misleading representations to certain customers when it represented that it had, and would continue to have, adequate systems and processes to provide them with the contractual benefits they were entitled to.
The penalty related to 71,461 occasions during the period 10 December 2015 to 30 September 2021 when the terms and conditions governing the Breakfree Package were issued to customers as well as 84,407 occasions during the period 10 December 2015 to 22 September 2020 when documents were issued relating to offset accounts.
ANZ’s Breakfree package, introduced in 2003, offered fee waivers, interest rate discounts on eligible ANZ products such as home loans, credit cards and transaction accounts and other benefits in exchange for paying an annual fee. ANZ’s offset customers were entitled to interest rate reductions on eligible home and commercial loans. These benefits were not always passed on to the customer.
ANZ was also ordered by the Court to publish an adverse publicity order on its website and online banking login page.
ANZ has made or is in the process of making remediation payments totalling approximately $211,512,939.80 to impacted customers. This figure comprises the amounts charged in error, interest and compensation reflecting the time value of money.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
