21 March 2018Hot off the Press
ANZ charged customers a total of at least $90 million in interest and fees on their home loans after experiencing continued processing errors, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry heard on Wednesday.
Sarah Mary Stubbings, ANZ’s head of home loan product, told the commission that $75 million has been refunded so far, with a further $18 million in compensation expected to be paid before Christmas 2018. This amount is on top of $130 million already paid in compensation over the last decade.
Many customers are still not aware of technical problems that meant their offset accounts were not linked to their home loans. These recurring problems have been traced to system and process failures.
Albert Dinelli, counsel assisting the Royal Commission, read from ANZ documents that processing errors relating to interest rates and home loans were reported internally in 2011. Although ANZ’s technology division raised the issue again in September 2014 — which resulted in it being referred to an external law firm — the Australian Securities and Investments Commission (ASIC) was not notified until October 2017.
Delayed communications seem to plague ANZ: in December 2016 staff in India noticed a processing error relating to interest rate discounts not being applied, but ANZ’s risk committee was not notified until April 2017. This affected nearly 2000 customers, who overpaid approximately $1 million in total.
Ms Stubbings confirmed to the Commission that despite ANZ’s efforts, the problems have continued to occur, admitting that it falls short of customer and community expectations. Ms Stubbings also confirmed that ANZ had delayed submitting reports on its technical problems to ASIC, sometimes by several months — well beyond the 10 days required.
Commissioner Kenneth Hayne informed Ms Stubbings that he will consider whether or not the bank had breached relevant legislation by not promptly submitting reports. The Commissioner also reprimanded ANZ for failing to provide requested documents to the Royal Commission.