Australia and New Zealand Banking Group to refund $90m to customers over incorrect interest rates

Australia and New Zealand Banking Group (ANZ) will have to refund about $90m to customers who were charged the wrong interest rate on their home loans, according to the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry.

The Melbourne-headquartered bank has separately paid at least $130m in remediation over other issues over the past decade, the Royal Commission heard on Wednesday.

ANZ has made a number of changes to its Breakfree home loan package and linking offset accounts after paying $69.3m to 400,000 customers who were charged excessive interest.

The Royal Commission was told there have been other processing errors related to various ANZ home loan accounts. These include customers who did not receive the appropriate interest rate discounts or fee waivers in 2016 and early 2017.

An ANZ document noted that the project team must identify how to “stop the bleed” on both issues prior to refunding customers.

Counsel assisting the Commission Albert Dinelli asked if that indicated ANZ did not prioritise refunding its customers as much as it should.

Sarah Stubbings, head of home loan product at ANZ, disagreed.

“As part of any remediation process, you actually have to stop the issue because otherwise, it’s very hard to remediate customers if you’ve still got customers that are being impacted by it,” she said.

Stubbings said ANZ had linked the offset accounts, but had not yet refunded the interest benefit they had missed out on.

About 2,800 customers are expected to be refunded $1.5m by Christmas.

Also read: Royal Commission grills ANZ about loans submitted by brokers