The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from Australia and New Zealand Banking Group (ANZ) following an investigation into fees-for-no-service conduct by the bank.
The corporate regulator found ANZ had failed to provide documented annual reviews to more than 10,000 Prime Access customers in the period 2006 to 2013.
The EU requires ANZ to pay a community benefit payment totalling $3 million and provide an audited attestation from senior management to provide “reasonable assurance” the bank has, since 2014, provided documented annual reviews to customers who were entitled to such reviews.
The bank must also provide further audited attestations from senior management as to the improvements it has made to its compliance systems and processes, and that the design and implementation of those systems and processes will seek to ensure documented annual reviews are provided in accordance with the ANZ Prime Access package.
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 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 reoccur.
“This EU with ANZ will deliver on that commitment.”
In addition to the EU, ANZ has agreed to compensate its Prime Access customers who, in the period 2006 to 2013, did not receive the documented annual reviews they were entitled to.
The compensation program is nearing completion and as at 28 February, ANZ had paid $46.81 million including earnings in compensation to these customers, with the total compensation estimated at $46.85 million.