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Australian regulator sues ANZ over alleged overstatement of credit card balances

·1 min read
FILE PHOTO: A man talks on his phone in front of an ANZ Banking corporation tower in central Sydney

(Reuters) -Australia's market regulator said on Monday it had commenced civil penalty proceedings against Australia and New Zealand Banking Group for allegedly misleading its customers over their credit card accounts.

About 165,750 ANZ clients were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts between May 2016 and November 2018, based on incorrect account balances, the regulator said in a statement.

The Australian Securities and Investments Commission (ASIC) said that in some cases, single customers were charged thousands of dollars in fees.

"This alleged misconduct is the result of system errors within ANZ and a lack of effort to comprehensively fix these issues," said ASIC Deputy Chair Sarah Court.

ANZ said it was considering the matters raised by ASIC.

"ASIC's claims relate to a particular situation, where funds are deposited to put a credit card account into a credit balance, and a cash advance is subsequently made on the account drawing down on the credit balance before the deposit is processed," ANZ said in a statement.

Although the lender has remediated over A$10 million ($7 million) to customers who were affected up until 17 November 2018, ASIC said it is seeking orders from the court to remediate customers who have been wrongly charged since 2018.

($1 = 1.3968 Australian dollars)

(Reporting by Upasana Singh in Bengaluru; Editing by Lincoln Feast.)