Australian regulator sues ANZ for failing to provide benefits to half a million customers

FILE PHOTO: The logo of the ANZ Banking Group is displayed in the window of a branch in central Sydney, Australia

(Reuters) -Australia’s securities regulator said on Thursday it was suing Australia and New Zealand Banking Group for failing to provide over half a million customers with promised benefits, which led to the payment of A$200 million ($143.40 million) in remediation.

The Australian Securities & Investments Commission (ASIC) said ANZ had failed to pay benefits under its ‘Breakfree’ package, which included fee waivers and interest rate discounts, to 580,447 customers between the mid-1990s to September 2021.

Scrutiny of Australian lenders and financial institutions has ramped up significantly since a Royal Commission inquiry in 2018 found widespread shortcomings in the sector, forcing companies and regulators to take swift action.

“This case is yet another example of a widespread system failure by a major bank impacting thousands of customers,” ASIC Deputy Chair Sarah Court said in a statement.

“A constant theme of those investigations has been the failure of large financial services entities to honour agreements with customers and to ensure proper processes and systems are in place to prevent widespread compliance failures.”

ANZ said in a separate statement that it would not contest the proceeding, and would join the ASIC in submitting a proposed penalty of A$25 million to the Court.

($1 = 1.3937 Australian dollars)

(Reporting by Arundhati Dutta in Bengaluru; Editing by Shailesh Kuber)