The Australian Securities and Investments Commission (Asic) has also accepted an enforceable undertaking from ANZ.
This is a written agreement that identifies the steps that the bank will take to resolve the service failures to ensure they don’t happen again.
It is an alternative to prosecution and allows a company or organisation to voluntarily enter into a binding agreement to resolve a breach and remedy any harm.
Fee for no service
Asic investigated ANZ in relation to what it describes as ‘fees for no service’, specifically related to the Prime Access service package offered to financial planning customers for an annual fee from 2003.
A key component of the package was a documented annual review of the customer’s financial plan.
ANZ Financial Planning was aware as early as 2008 that documented annual reviews were not provided to some Prime Access customers. However, it did not report the issue to Asic until August 2013.
In addition to the undertaking and A$3m (£1.6m, $2.3m, €1.9m) fine, ANZ has been compensating customers who, between 2006 and 2013, did not receive the reviews for which they were charged.
As at 28 February 2018, ANZ has paid A$46.81m to these customers, with total compensation estimated at A$46.85m.
Breach of trust
Asic deputy chair Peter Kell said: “Our report into fees for no service in October 2016 identified the major financial institutions’ systemic failures in this area, which required affected customers to be fairly compensated and to be provided with the services that they have paid for.
“Asic considered it critically important that improved systems and procedures be put in place to ensure this breach of trust could not re-occur. This enforceable undertaking with ANZ will deliver on that commitment,” he said.
