ANZ Receives EU Over Fees For No Service

ASIC has accepted an enforceable undertaking (EU) from the ANZ Bank after it was found, over seven years, to have charged more than 10,000 customers for advice reviews they did not receive.

The ASIC action is the result of an investigation into ANZ’s Prime Access service package which was offered to financial advice customers for an annual fee from 2003 and included a documented annual review of the customer’s financial plan.

Under the conditions of the EU, ANZ will be required

  • to pay a community benefit payment totalling $3 million
  • provide an audited attestation from ANZ senior management that gives ‘reasonable assurance’ that ANZ has, since 2014, provided documented annual reviews to customers entitled to reviews.
  • provide an audited attestation from ANZ senior management regarding improvements that have been made to the bank’s compliance systems and processes, and the design and use of those systems and processes ensure documented annual reviews are provided in line with the ANZ Prime Access package.

ASIC’s investigation found that ANZ had failed to provide documented annual reviews to more than 10,000 Prime Access customers in the period from 2006 to 2013.

The regulator also noted that as far back as 2008, ANZ Financial Planning was aware of a number of cases in which annual reviews had not been provided, and there was a risk that other Prime Access customers were not being provided with annual reviews, but the conduct continued until 2013, and ANZ did not breach report the conduct to ASIC until August 2013.

ANZ acknowledged in the EU that ASIC’s concerns were reasonably held and, in addition to the EU,  had agreed to compensate those customers.

ASIC stated the compensation program was nearly complete and at the end of February 2018, ANZ had paid $46.81 million of a total estimated compensation of $46.85 million to these customers.