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ANZ to refund $28m in wrongly charged banking fees

9 September 2016

ANZ to refund $28m in wrongly charged banking fees

ANZ is refunding $28.8 million to 376,570 retail accounts, and 17,230 business accounts, after it failed to clearly communicate when certain periodical payment fees would apply. 

Periodical payments are those payments we use set up, often through internet banking, to make a fixed payment amount to another account. These periodical payments are an alternative to setting up direct debit, by enabling customers to establish a regular payment to another account (for example, to make a monthly payment to cover rental payments ). Banks may charge a fee for this service, depending on the terms and conditions for the account.   

In ANZ's case, the account terms and conditions stated that a periodical payment was a transaction to 'another person or business.' This meant that transactions made by the customer to another account in the customer's own name, whether with ANZ or another financial institution, were not covered by ANZ's own definition of a periodical payment and could not be charged the fees that could otherwise apply to periodical payments.  

ANZ discovered that it was charging fees on payments made between accounts held in the customer's own name, contrary to its definition of a 'periodical payment'. The fees included non-payment fees charged on personal and business accounts when a period payment between the customers' own accounts did not proceed because of insufficient funds.

Having identified this issue ANZ advised ASIC recognizing the mistake as a significant breach of its financial services obligations.

ASIC acknowledged the proactive approach taken by ANZ in its handling of this matter, and its appropriate reporting of the matter to ASIC. 

To make good on this mistake ANZ is in the midst of refunding fees that were charged to customers for payments into another account in the customer's own name, and have said they will have made all the necessary refunds by 30th September 2016. 

The issue highlights the importance of picking an account that can help minimise your fees.

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