ANZ has been fined $25 million for misleading more than 680,000 customers. 

The Federal Court issued a serious fine to The Australia and New Zealand Banking Group Limited (ANZ) this week, after finding it had failed to provide a number of benefits it had agreed to give certain customers.

ANZ did not provide benefits such as fee waivers and interest rate discounts to about 689,000 customer accounts from the mid-1990s up until September 2021.

Some of the conduct related to the treatment of clients using ANZ's Breakfree package, which was introduced in 2003.

Breakfree offered fee waivers, interest rate discounts on eligible ANZ products such as home loans, credit cards and transaction accounts and other benefits in exchange for paying an annual fee.

ANZ collected $1.9 billion in annual package fees from customers holding the Breakfree package from October 1, 2003, to September 30, 2021, according to the agreed statement of facts. 

The customers were entitled to interest rate reductions on eligible home and commercial loans, but these benefits were not always passed on.

ANZ was found to have contravened the ASIC Act, the Corporations Act, and the National Consumer Credit Protection Act, including making false or misleading representations when to certain customers when it it said that it had, and would continue to have, adequate systems and processes to provide customers with the contractual benefits they were entitled to.

Justice David O'Callaghan said the contraventions occurred over a substantial period of time and affected many customers, meaning a significant amount of money had to be remediated.

“There was also a significant delay in identifying impacted customers, and therefore remediating them,” Justice O'Callaghan said. 

“Although the nature of the acts or omissions comprising the contraventions was that of inadvertence, the conduct continued as long as it did because of inadequacies within ANZ's systems, which were compounded by inaction or ineffective action.”

ANZ has been ordered to publish an adverse publicity order on its website and online banking login page.

“While the court accepted that ANZ's conduct was not deliberate, and acknowledged ANZ's cooperation during the ASIC investigation, ANZ accepts that its conduct fell short of expectations and apologises to its customers who have been impacted,” ANZ said in a statement. 

This matter was the final civil case to come out of ASIC's enforcement investigations based on the findings of The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.