The Federal Court has ordered Australia and New Zealand Banking Group Limited (ANZ) to pay a $15 million penalty after it admitted to misleading customers as to the funds available to those consumers in certain credit card accounts.

The Court found ANZ breached the ASIC Act and the National Consumer Credit Protection Act by falsely indicating customers could obtain a cash advance from funds stated to be their ‘Available Funds’ without incurring fees and interest.

The Court found ANZ had not cleared deposits into the credit card accounts, meaning the ‘Available Funds’ amount was incorrect and was showing a larger amount than what was available for withdrawal without incurring fees or interest. Customers who obtained a cash advance based on these available funds were hit with fees and interest.

ASIC Deputy Chair Sarah Court said, ‘Customers deserve clear and accurate information about available funds in their accounts and what fees and charges may be applied. Many ANZ customers relied on the account information displayed by the bank and were charged fees that were inconsistent with that information.’

The Court also found ANZ did not act efficiently, honestly and fairly by failing to take timely action to address the problem.

‘These are errors that we expect a bank to be aware of and fix in a timely manner. It should not have taken ANZ several years to address this issue.

‘ASIC will continue to take action against banks who fail in their duty to act efficiently, honestly and fairly in dealings with customers,’ concluded Ms Court.

Over 186,000 accounts have been remediated by ANZ for fees and interest charged on cash advances. In some cases, single customers were charged thousands of dollars in fees while the average remediation paid was around $45 per affected account.

In addition to the $15 million penalty, ANZ will establish a remediation program to repay affected ANZ customers who were charged a cash advance fee between November 2018 and September 2021.

ANZ admitted the contraventions, consented to orders being made and the parties made joint submissions on liability and penalty.

The Court will publish its written reasons for the judgment at a later date.

Background

In addition to the $15 million penalty and new remediation program, ANZ has provided remediation payments of more than $8.3 million to approximately 186,000 accounts that were charged cash advance fees and interest between May 2016 to November 2018.