ANZ Bank sued over loan standards in Guam

Australian Financial Review Mar 22 2018 5:22 PM

Emily Cadman (Bloomberg)

For Australian banks the jabs just keep coming - and not always from the most expected sources.

ANZ Bank is facing a civil suit in Guam over lending standards at its American Samoa offshoot.

Two retired US military veterans claim the Melbourne-based bank is liable for "systematic violations of the Truth in Lending Act," according to documents filed in the Guam district court March 21. They claim the bank breached mortgage contracts in charging excessive late fees, didn't provide adequate notice of changes in interest rates and didn't provide adequate bank statements.

Ironically for the bank, a trigger for the lawsuit was a letter it sent to one of the plaintiffs in 2015 acknowledging it had overcharged $6,375.18 in interest. After resolving to monitor their balance more closely, the plaintiffs say they became "frustrated by the lack of clear and conspicuous information" - citing one letter they received that gave a projected balance of $51,952.55 on one page and $41,564.40 on another.

A spokesman for ANZ didn't immediately reply to a request for comment.

In Australia, the bank has refunded customers $90 million after identifying technical glitches that resulted in incorrect interest rates or fees being charged.

That ANZ has a retail operation in American Samoa - with a population of 56,000 and 3,180 miles from its Melbourne headquarters - at all is a legacy of its ill-fated overseas expansion in the early 2000s. It bought the American Samoa operations in 2001 and its Guam business in 2007, according to the court filing.