ANZ set to pay $13 million for bonus interest breach
Australia and New Zealand Banking Group (ANZ) has been ordered to pay approximately $13 million in compensation after failing to accurately apply bonus interest to Progress Saver Accounts (PSA) for a number of years.
The breach affected PSA holders who made qualifying deposits or disqualifying withdrawals near the end of their monthly interest cycle, with ANZ misaligning the monthly cycle it applied to determine the eligibility of PSA holders' bonus interest payments, as well as the bonus interest amount distributed.
According to an ASIC statement, ANZ first reported the matter to ASIC under its breach reporting obligations in the Corporations Act 2001.
"ANZ has taken its breach reporting obligations seriously in this matter," ASIC Deputy Chairman, Peter Kell said.
"Breach reporting helps ASIC ensure affected consumers are returned to the position they would have held if it were not for the breach occurring at all."
ASIC confirmed that close to 200,000 customers will now be compensated, with the refund payment including an additional amount to recognise the time elapsed since the initial breach.
The breach was first discovered by ANZ following a customer complaint, which was then reported by the bank to ASIC.
ANZ advised ASIC of its intention to undertake a thorough account reconstruction exercise to determine the financial impact on all affected PSA holders.
The bank has issued letters to current PSA holders to "clarify and update" existing terms and conditions — including requirements and timing to qualify for bonus interest payments.
ANZ will now contact and provide refunds to affected past and present PSA holders, a process which is expected to be completed by the end of this week.
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