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After weeks of criticism over lack of transparency at the four major banks, it was announced today that ANZ will have to pay $3m after an investigation by the Australian Securities and Investments Commission (ASIC).
The investigation looked into ANZ’s fees for no service conduct concerning the Prime Access service package, which offered customers access to financial planners and investment alerts for an annual fee.
The investigation found that ANZ had failed to provide documented annual reviews to more than 10,000 customers from 2006 to 2013.
Not only is the lender currently facing a civil suit in Guam over lending standards at its American Samoa offshoot, but it has received its fair share of backlash at the Royal Commission.
ANZ has confirmed it has agreed to an enforced undertaking, meaning it has to pay a community benefit payment of $3m. An independent expert will also be appointed to provide an assurance ANZ has delivered the documented client reviews since 2014 and has made the necessary changes to systems, controls and processes to ensure documented reviews continue to be delivered annually as required.
ASIC Deputy Chair Peter Kell said: “Our report into fees for no service in October 2016 identified the major financial institutions' systemic failures in this area, which required affected customers to be fairly compensated and to be provided with the services that they have paid for.
“ASIC considered it critically important that improved systems and procedures be put in place to ensure this breach of trust could not re-occur. This enforceable undertaking with ANZ will deliver on that commitment.”
ANZ has also agreed to compensate customers who did not receive the documented annual reviews that they were entitled to. Total compensation is estimated at $46.85m and at the end of February ANZ had paid $46.81m.
ANZ Group Executive Wealth Australia, Alexis George said: “We acknowledge we did not meet customers’ expectations by not providing them the services we promised. We have since introduced measures to prevent this from happening again and have largely completed making remediation payments to impacted clients.”
As a result of the investigation ASIC raised concerns that from as early as 2008, ANZ Financial Planning was aware of instances where documented annual reviews had not been provided to customers. Despite this and the risks it entailed, ANZ did not report it to ASIC until August 2013.
ANZ failed to comply with section 912A(1)(a) of the Corporations Act which states a financial services licensee must do all things necessary to ensure the financial services covered by the licence are provided efficiently, honestly and fairly and a condition of its Australian financial services licence.
