ANZ sanctioned for charging fees to accounts of dead customers

The banking watchdog has sanctioned ANZ for continuing to charge or failing to refund fees for deceased estates, and failing to respond to representatives of deceased estates within the required timeframe.

On Tuesday, the Banking Code Compliance Committee (BCCC) chair, Ian Govey, said the decision to name ANZ for its non-compliance reflected the seriousness of the bank’s breaches.

The compliance committee said ANZ’s inability to accurately quantify breaches of its fee obligations called into question the adequacy of its compliance frameworks.Credit: Natalie Boog

“Naming a bank is a sanction that we reserve for the most serious and systemic breaches,” he said.

“The significance of the deficiencies in ANZ’s compliance frameworks was deeply concerning. Its non-compliance warranted such a sanction.”

The compliance committee, an independent body established to ensure compliance with the Banking Code of Practice, found last year that six Australian banks, including the big four, had charged fees for services no longer provided on deceased estates.

On Tuesday, the BCCC said between July 2019 and September 2023, ANZ breached its code obligations by failing to stop or refund fees charged to estates of customers who had died. The watchdog also said ANZ failed to respond to instructions or requests for information from representatives of deceased estates within the required 14 days.

“Despite first identifying the issues in early 2022, ANZ took over a year to implement solutions and then nearly two years to start its customer remediation program, which is still ongoing and expected to be finalised by the end of July 2024,” the BCCC said.

Govey also said there were concerns about ANZ’s remediation efforts, which failed to meet expectations.

“Once aware of the issues, ANZ did not act with sufficient urgency to remediate the affected customers,” he said. “It should have done more to address this more quickly.”

The compliance committee also said ANZ’s inability to accurately quantify breaches of its fee obligations called into question the adequacy of its compliance frameworks and ability to monitor and comply with its code obligations effectively.

However, the BCCC acknowledged that ANZ’s remediation made assumptions beneficial to customers, such as reimbursing charges that might have already been refunded. At completion, the customer remediation will consist of payments of nearly $3.3 million to 18,852 impacted estates.

The watchdog formally warned another bank, which it said had also breached BCCC obligations by failing to stop or refund certain fees charged to deceased estates. It chose not to name this bank, saying a warning was appropriate in the circumstances.

ANZ general manager of customer service operations Dan O’Neill said ANZ was investing millions of dollars to make sure the bank had the right staff, training and processes in place.

“We know we have not always met the expectations of our customers and their families at a difficult time in their lives,” he 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.”

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