ANZ have acknowledged the release of the Banking Code Compliance Committee’s (BCCC) finding regarding the major bank’s management of the estates of deceased customers.
The BCCC, which monitors adherence to the Banking Code of Practice, sanctioned ANZ for not stopping or refunding fees for deceased estates, as well as not responding to representatives of deceased estates within the required timeframe.
ANZ general manager customer service operations, Dan O’Neill (pictured above left) said the bank’s customers, their families and their representatives should “rightly expect compassionate and timely support from ANZ”.
“We know we have not always met the expectations of our customers and their families at a difficult time in their lives,” O’Neill said.
“For too many it has been a frustrating experience. For this we are sorry, and we are committed to continuing to make changes to better support our customers and their representatives.”
Between July 2019 and September 2023, ANZ breached its Code obligations by failing to stop or refund fees charged to deceased estates after customers’ deaths, according to the BCCC investigation.
To remediate, ANZ will pay approximately $3,253,646 to 18,852 impacted estates.
This amount includes estimated “time value of money” payments of $391,486 which is compensation for the period of time that estates did not have use of the funds.
ANZ further breached its Code obligations by not responding to instructions or requests for information from representatives of deceased estates within the required 14 days.
In February 2022, ANZ identified a backlog of 7,329 delayed cases of deceased estates.
ANZ advised it would need to manually review each case to identify those that breached the Code’s 14-day obligations.
As individual manual reviews were impractical, ANZ adopted a proxy measure of potential breaches by identifying deceased estate cases that were awaiting action for longer than 90 days.
ANZ will send approximately 10,604 apology letters to representatives of these estates affected by potential delays.
For up to 1,421 of these cases, ANZ will pay financial compensation of around $667,915.
Based on the number of impacted customer accounts, the investigation found that the breaches were “systemic in nature”.
BCCC chair Ian Govey AM (Pictured above right) noted the seriousness of the breaches.
“The significance of the deficiencies in ANZ’s compliance frameworks was deeply concerning. Its non-compliance warranted such a sanction,” said Govey.
In terms of the sanction, the BCCC handed down a sentence that “reflects the seriousness” of the Code breaches: being named.
“Naming a bank is a sanction that we reserve for the most serious and systemic breaches,” said Govey.
ANZ responded to the investigation by making “16 distinct improvements”, with a further seven changes already in train.
O’Neill said the company is investing millions of dollars to “make sure we have the right staff, the right training, and the right processes in place”.
“We have significantly improved the time it takes us to provide information about a customer’s accounts to their representatives and the time it takes us to finalise cases once we receive all of the required information,” O’Neill said.
“Where we have made a mistake and have charged fees in error, we review what has occurred and remediate the customer in full as soon as we can. For most impacted customers, these processes have been completed.”
Changes ANZ has already implemented include:
However, Govey noted concerns with the remediation efforts from ANZ, saying, “it did not meet expectations”.
“Once aware of the issues, ANZ did not act with sufficient urgency to remediate the affected customers. It should have done more to address this more quickly,” Govey said.
“While we have seen significant improvements in the time taken to finalise cases, we remain focused on delivering the remainder of our changes,” O’Neill said.
The BCCC also found that another bank had breached obligations by failing to stop or refund certain fees charged to deceased estates after customers’ deaths.
The bank confirmed that 2,441 customer accounts were impacted by the above issues.
Despite this, the BCCC acknowledged that remediation included the use of assumptions beneficial to customers, including reimbursing charges that may already have been refunded.
So far, the bank has refunded fees totalling $124,460.29 to impacted accounts.
This amount includes $94,139 of fees that may not represent a breach of the Code but which the bank chose to refund on a “customer beneficial” basis.
In this case, the sanction from the BCCC was to formally warn the bank about its conduct.
“We determined that in this case a warning was appropriate given the circumstances,” Govey said. “We considered the lower financial impact, the smaller number of affected estates and the swiftness with which the bank acted.”
“It identified the issue in June 2022 and by August 2022 had taken action to prevent future breaches.”
The sanctions come off the back of the BCCC’s inquiry from 2023 which examined banks’ compliance with obligations for deceased estates in the Banking Code of Practice.
The inquiry led to three investigations, the third of which is expected to be finalised shortly.
“Our inquiry and investigation work promotes Code compliance, holds banks accountable to their commitments, and ensures banks take appropriate action to make things right for customers,” Govey said.
