ANZ fails COVID fairness test
Consumer advocate Choice has ranked Australia’s Big Four banks on their COVID-19 responses with ANZ scoring the worst.
The COVID Fairness Scorecard compared the banks’ actions in helping Australians navigate financial hardship arising from COVID-19.
ANZ’s score was 46%, followed the Commonwealth Bank of Australia (CBA) (47%), National Australia Bank (NAB) (53%) and Westpac (59%).
Choice had called on the banks to refund interest accrued on deferred loans for all people in financial hardship, cut exorbitant interest rates on credit cards to reflect current cash-rate, end the marketing of harmful balance transfer credit cards, and waive debts for people in long-term financial hardship.
Alan Kirkland, Choice chief executive, said the banks needed to do more as people struggled to manage their finances after a significant drop in income.
“While their marketing teams have been quick to tell the community how they’re helping, our analysis has found a lot left to be desired in their COVID-19 responses,” Kirkland said.
“ANZ came last in the Choice COVID Fairness Scorecard. In particular, Choice experts found ANZ continued to take advantage of credit card customers with outrageously high interest rates."
Kirkland also said CBA did poorly due to its decision to switch all mortgage customers to minimum repayments without their consent.
“This careless decision means many people, irrespective of whether they are in hardship, will pay more interest over a longer time. Customers should have been given a choice," Kirkland said.
Westpac and NAB had scraped through with a pass, but Kirkland said there were still many areas for improvement.
“Despite landing the top spot, Westpac has the most expensive credit card on the market, at the eye-watering rate of 20.49%, while NAB’s supposedly low rate card comes with a 12.99% interest rate,” Kirkland said.
“In a rare example of industry leadership, Westpac deserves to be applauded for its decision not to charge interest on personal loans and credit cards for people who have had repayments paused.
“This means that their debts won’t keep growing while they are getting their finances back on track.”
AUTHOR
Chris Dastoor
Recommended for you
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.
Lower fees and trustworthiness are the top factors enticing unadvised Australians to seek a financial adviser, according to Fidelity International, common across all generations.
