ANZ must pay it customers $13 million after failing to accurately apply bonus interest, says the Australian Securities and Investment Commission (ASIC).
Australia and New Zealand Banking Group (ANZ) is compensating around 200,000 customers approximately $13 million after it failed to accurately apply bonus interest to Progress Saver Accounts (PSA) for a number of years. The refund payment includes an additional amount to recognise the time elapsed since the initial breach. ANZ reported this matter to ASIC under its breach reporting obligations in the Corporations Act.
PSA holders qualify for bonus interest payments in any particular month if they satisfy deposit and withdrawal requirements for that month. ANZ misaligned the monthly cycle it applied to determine whether a PSA holder was eligible for bonus interest payments and the monthly cycle it applied to calculate bonus interest payments. This issue was limited to PSA holders who made qualifying deposits or disqualifying withdrawals near the end of their monthly interest cycle, and did not impact the payment of bonus interest in other circumstances.
As a result, PSA holders may have made a qualifying deposit or disqualifying withdrawal on the last day of the previous monthly cycle while believing that it was the first day of a new monthly cycle.
ANZ discovered the breach following a customer complaint and reported it to ASIC. ANZ advised ASIC of its intention to undertake a thorough account reconstruction exercise to determine the financial impact on all affected PSA holders. The financial impact is dependent on what other transactions occurred in neighbouring monthly cycles.
ASIC Deputy Chairman Peter Kell said, 'ANZ has taken its breach reporting obligations seriously in this matter. Breach reporting helps ASIC ensure affected consumers are returned to the position they would have held if it were not for the breach occurring at all.'
ASIC acknowledges the cooperative approach taken by ANZ to resolve this matter.
ANZ has issued letters to current PSA holders to clarify and update existing terms and conditions such as requirements and timing to qualify for bonus interest payments.
ANZ is contacting and providing refunds to affected past and present PSA holders, a process that should be completed by the end of this week.
Customers with queries or concerns about this matter should contact ANZ on 13 13 14.