The Federal Court of Australia has slapped a hefty AUD10 million (around $7.14 million) penalty to Australia and New Zealand Banking Group Limited (ANZ) on Thursday as the bank was engaged in ‘unconscionable conduct’ and also breached its obligation with its customers.
Friday’s press release by the Australian Securities and Investments Commission (ASIC) detailed that the bank charged fees to its customers for periodic payments between August 2003 and September 2015. However, the bank was not entitled to charge any fees for transactions between accounts held under the same customer name.
Knowingly Charging Inappropriate Fees
Despite receiving red flags from external lawyers about such charges in July 2011, the bank continued to charge its the ‘same-name’ fees to its customers.
The regulator detailed that around 69,000 ANZ customers were affected by the unlawful fees, and the bank pocketed around AUD3.1 million ($2.21 million).
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The bank has already paid some of the affected customers with around AUD25 million (~$1.79 million) as remediation payments, but could not pay the rest, which will go towards ASIC as unclaimed money or charity.
“The outcome and penalty imposed by the Court is a strong deterrent message and reflects ASIC’s position that ANZ lacked contractual entitlement to charge these particular fees,” ASIC Deputy Chair, Daniel Crennan QC said.
“ASIC acknowledges the cooperative approach taken by ANZ to this litigation, which allowed the matter to be efficiently resolved by the Court. It is in the public interest that parties to regulatory litigation cooperate where possible.”
Last month, an Australian court fined two entities of the National Australia Bank with approximately $41.87 million for making false and misleading representations to superannuation members about various charges and associated service fees.