ANZ has admitted to widespread misconduct, impacting both the Australian Government and tens of thousands of retail customers. 

The major lender faces $240 million in penalties, $40 million of which relates to its alleged failure to respond to customers – including mortgage holders – seeking hardship arrangements.

The Australian Securities and Investments Commission (ASIC) claims ANZ sometimes took more than two years to respond to borrowers submitting hardship notices, including those facing unemployment, illness, bereavement, and family violence.

ASIC also alleges the bank acted unconscionably when managing a $14 billion bond issuance, made false and misleading statements about savings account interest rates and failed to pay many deposit customers their promised rate, and failed to refund fees charged to deceased customers.

"The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues," ASIC chair Joe Longo said.

"This outcome shows an unacceptable disregard for that trust that is critical to the banking system."

ASIC and ANZ will now ask the Federal Court to impose the agreed penalties.

"The failings outlined are simply not good enough and they reinforce the case for change," ANZ CEO Nuno Matos said.

"Unfortunately, some of our failings occurred when our customers were at their most vulnerable.

"For this we are deeply sorry, and we are making changes to better support our customers when they need us most."

ANZ hardship failures a result of systematic faults

ASIC alleges ANZ breached the Credit Code on as many as 668 occasions when home loan, credit card, personal loan, and overdrawn customers reached out for hardship support between May 2022 and September 2024.

The breach is said to be a result of ANZ not having adequate processes to record and respond to hardship notices received by branch, call centre, and mobile lending staff.

According to the watchdog, between September 2019 and September 2023, front line staff typically directed struggling borrowers towards contact details for the bank's hardship team.

ASIC argues that, where staff didn't make a record of the customer's request, connect the customer with the hardship team, or otherwise make a referral to the hardship team, it was likely the bank would not have responded to the request in the legally mandated time frame.

ANZ attempted to mend the process in September 2023, but lapses continued into late 2024.

In some cases ANZ was said to have began debt collection proceedings – sending default and demand notices and referring customers to debt collection agencies – despite not having responded to the impacted customers' hardship request.

The bank has since undergone a remediation program which included providing payments worth a total of $92,687, removing credit listings and amending credit reports, and sending apology letters.

"It is good to see a proposed penalty that reflects the gravity of the failures, now the focus must be on meaningful reform and rebuilding trust," said Domenique Meyrickshe, co-CEO of Financial Counselling Australia.

"Too many people were left without the support they needed, when they needed it most.

"That is simply unacceptable."

The $40 million fine facing ANZ on the back of hardship failures comes just weeks after fellow big four bank NAB was hit with a $15.5 million penalty for similar failures.

ASIC alleged NAB and a subsidiary failed to respond to more than 300 hardship requests due to staff incorrectly using a 'reject' button in the bank's system.

Image by Mattinbgn on Wikimedia Commons

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