ANZ fined for overdrafts breach

7 March 2016

Michael Roddan

http://www.businessspectator.com.au/news/2016/3/7/industries/anz-fined-overdrafts-breach

ANZ has paid a fine of more than $200,000 after the bank breached responsible lending laws when it was offering overdrafts to customers,

The Australian Securities and Investments Commission said ANZ, which offered customers the option to enter into an overdraft facility with a specified limit of either $500 or $1000, failed to give the customers the option to elect a different overdraft amount.

ASIC said these failures by ANZ breached the bank’s obligation to make reasonable inquiries about the credit limit a customer requires, a consumer protection which gives customers the ability to select credit limits which meet their needs. The bank paid a total $212,500 for the breach.

“The requirement to make inquiries about a consumer's credit limit was a deliberate addition to the general responsible lending obligations by the government,” ASIC deputy chairman Peter Kell said.

“The requirement is designed to ensure that consumers do not end up with unmanageable debt,” he said. “This case demonstrates that ASIC will impose penalties for breaching these important protections.”

The corporate watchdog said ANZ co-operated with ASIC's investigation, and that it issued five separate infringement notices to the bank following the breaches.

The penalty comes as ANZ is fighting a separate, unrelated case against ASIC regarding the alleged manipulation of the bank bill swap rate, the primary interest rate benchmark in Australian financial markets. ANZ reportedly offered more than $50m to settle the Federal Court lawsuit.