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.

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Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
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6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
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5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .



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

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