ANZ pays $212,500 penalty for overdraft law breach
ASIC investigation highlights a year of problematic overdrafts.
ANZ has agreed to pay $212,500 in penalties after an investigation by the Australian Securities & Investment Commission (ASIC) found that it had offered overdrafts to some customers without investigating whether they could afford them.
Under responsible lending laws introduced in 2011 as part of the National Consumer Credit Proection Act, banks must make "reasonable inquiries" about the credit limit a customer needs, rather than simply offering a single figure as a "take it or leave it" offer.
ASIC's investigation found that between November 2014 and November 2015, ANZ sent some existing customers written offers of overdrafts under its "ANZ Assured" overdraft scheme that breached the requirements of the act.
Some customers were offered a $500 overdraft, but not given an option to choose a different amount. Others were offered a $1,000 limit, but could only choose to vary that if they accepted by phone or through online banking. Customers who accepted in person or by mail didn't have that option.
"The requirement [to investigate and offer alternatives] is designed to ensure that consumers do not end up with unmanageable debt," ASIC deputy chairman Peter Kell said in a statement announcing the penalties. "This case demonstrates that ASIC will impose penalties for breaching these important protections."
ANZ co-operated with the investigation and has agreed to the penalty.
If you do have an overdraft, it's important to be clear about the associated fees and charges so that you don't end up with unexpected debts. Check out our detailed guide to pick the right overdraft for you.