ANZ to Refund $28.8 Million to Clients After Unclear Fee Disclosures
- ANZ is set to repay its business and retail clients for failure to clearly disclose when periodical payment fees would apply.
The Australian Securities and Investment Commission (ASIC) announced today that Australia and New Zealand Banking Group Limited (ANZ) plans to refund $28.8 million to 376,570 retail accounts, and 17,230 business accounts, after failing to clearly disclose when certain periodical payment fees would apply.
'Set and Forget' Fixed-Amount Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term
Periodical payments are automatic 'set and forget' fixed-amount payments put in place by the customer which are used as an alternative to direct debit arrangements and allow customers to establish a regular payment to another account. Banks may charge a fee for this service, depending on their terms and conditions.
In ANZ's case, the account terms and conditions stated that a periodical payment was a transaction to “another person or business”. This meant that transactions made by the customer to another account in the customer's name, whether with ANZ or another financial institution, were not covered by ANZ's own definition of a periodical payment. For this reason customers could not be charged the fees that would otherwise apply to periodical payments.
Reported Discovery to ASIC
ANZ discovered that it was charging fees on payments made between accounts held in the customer's own name, contrary to its definition of a “periodical payment”. ANZ subsequently reported the matter to ASIC as a significant breach of its financial services Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term.
ASIC has acknowledged the cooperative approach taken by ANZ in its handling of this matter, and its appropriate reporting of the matter to ASIC.
Refund of Fees
As a result, ANZ will refund fees that were charged to customers for payments into another account in the customer's own name. The total amount being refunded includes approximately $25.8 million with an additional $3 million in interest.
ANZ has subsequently changed its terms and conditions to clarify instances where fees for periodical payments apply to an ANZ deposit account.
ASIC Deputy Chairman Peter Kell said: “Good fee disclosure is integral to ensuring that consumers are in an informed position about how best to manage the cost of their banking.”
The Australian Securities and Investment Commission (ASIC) announced today that Australia and New Zealand Banking Group Limited (ANZ) plans to refund $28.8 million to 376,570 retail accounts, and 17,230 business accounts, after failing to clearly disclose when certain periodical payment fees would apply.
'Set and Forget' Fixed-Amount Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term
Periodical payments are automatic 'set and forget' fixed-amount payments put in place by the customer which are used as an alternative to direct debit arrangements and allow customers to establish a regular payment to another account. Banks may charge a fee for this service, depending on their terms and conditions.
In ANZ's case, the account terms and conditions stated that a periodical payment was a transaction to “another person or business”. This meant that transactions made by the customer to another account in the customer's name, whether with ANZ or another financial institution, were not covered by ANZ's own definition of a periodical payment. For this reason customers could not be charged the fees that would otherwise apply to periodical payments.
Reported Discovery to ASIC
ANZ discovered that it was charging fees on payments made between accounts held in the customer's own name, contrary to its definition of a “periodical payment”. ANZ subsequently reported the matter to ASIC as a significant breach of its financial services Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term.
ASIC has acknowledged the cooperative approach taken by ANZ in its handling of this matter, and its appropriate reporting of the matter to ASIC.
Refund of Fees
As a result, ANZ will refund fees that were charged to customers for payments into another account in the customer's own name. The total amount being refunded includes approximately $25.8 million with an additional $3 million in interest.
ANZ has subsequently changed its terms and conditions to clarify instances where fees for periodical payments apply to an ANZ deposit account.
ASIC Deputy Chairman Peter Kell said: “Good fee disclosure is integral to ensuring that consumers are in an informed position about how best to manage the cost of their banking.”