Financial watchdog drags ANZ Bank to court over alleged credit card bungle

More than 160,000 ANZ customers could be compensated after allegations the bank misled them on the balance of their credit card accounts.

ANZ Bank could be forced to compensate more customers amid allegations it has continued to mislead people on the balance on their credit card accounts, subsequently saddling them with extra fees.

The financial watchdog on Monday announced it was taking action against ANZ in the federal court over concerns that, for a long period of time, ANZ overstated the available funds and balances on credit card accounts.

The watchdog also claims ANZ charged fees and interest to customers who relied on this information when making withdrawals.

“In some cases single customers were charged thousands of dollars in fees while the average cash advance fees and interest charged per affected account was $47,” ASIC deputy chair Sarah Court said.

While ANZ has remediated over $10 million to customers who were affected up until November 2018, the watchdog says the problem is continuing.

ASIC says that between May 2016 and November 2018, around 165,750 ANZ customers were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts based on an incorrect account balance, including on the ANZ website, ANZ App and at ATMs.

ASIC also alleges that ANZ has not adequately fixed the problem and that customers continue to be affected.

While ANZ has remediated over $10 million to customers who were affected up until November 2018, the watchdog says the problem has continued.

“We say that ANZ has been aware of the unlawful charging since at least 2018 and the problem is still occurring today,” Ms Court said.

ASIC is seeking orders from the Court that customers who have been wrongly charged since 2018 also be remediated.

The $72 billion bank said it was considering ASIC’s claim.

ANZ in December also agreed to pay a $25 million penalty for failing to properly pay its customers under the terms of its Breakfree mortgage packages. Picture: NCA NewsWire / Sarah Matray

The bank said the matter related to “a particular situation” where funds are deposited to put a credit card account into a credit balance, and a cash advance is subsequently made on the account drawing down on the credit balance before the deposit is processed.

ANZ and the other major banks were forced to repay hundreds of millions to ripped-off customers in the wake of the 2018 Banking Royal Commission.

ANZ, AMP, Commonwealth Bank, Macquarie, NAB and Westpac had – as of January – either paid or offered $3 billion in compensation to customers that had been charged fees for no service or given non-compliant advice.

ANZ in December also agreed to pay a $25 million penalty for failing to properly pay its customers under the terms of its Breakfree mortgage packages.

Shares in the bank were flat on Monday, down 0.1 per cent at $25.66.

The other major lenders were also subdued, although Macquarie Group was bucking the trend with a 2.2 per cent gain to $186.955.

Bank of Queensland was also 0.9 per cent higher at $7.64.