ANZ faces $16 mln fine for withholding account benefits for 20 years

By Reuters October 25, 2022 | 06:22 pm PT

The logo of the ANZ Banking Group is displayed in the window of a branch in central Sydney, Australia, Aprl 30, 2016. Photo by Reuters/David Gray

Australia and New Zealand Banking Group was fined A$25 million ($16 million) for failing to provide agreed benefits to customers with offset transaction accounts under its 'Breakfree' package, Australia's market regulator said on Wednesday.

The Australian Securities and Investments Commission (ASIC) said the federal court realised the country's fourth-largest lender failed to provide fee waivers and rate discounts to at least 689,000 customer accounts for about 20 years.

The Breakfree package, introduced in 2003, offered fee waivers, interest rate discounts on home loans, credit cards and transaction accounts and other benefits in exchange for paying an annual fee.

ANZ's offset transaction customers were entitled to interest rate reductions on eligible home and commercial loans, which were not always passed on, the ASIC said.

"Having the necessary systems and processes to ensure customers are given the benefits they are promised is not an optional extra, it is a requirement," ASIC Deputy Chair Sarah Court said.

"ANZ ... for many years failed to prioritise and deploy the systems and processes necessary to fulfil its obligations."

The lender, which will report its annual results on Thursday, did not immediately respond to a request for comment.