The Australian Securities & Investments Commission (ASIC) has imposed a penalty of AUD 10 million on ANZ Group Holdings for non-compliance with consumer credit protection laws. The fine is related to the lender’s home loan introducer program that allowed third parties to refer customers for home loans between March 2017 and March 2018. The program was criticized in the Financial Services Royal Commission for exposing consumers to an additional layer of risk by insulating the lender from what the intermediary does with the borrower.
ASIC’s Statement
In a statement, ASIC said that ANZ’s program did not meet regulatory standards and that the bank failed to take reasonable steps to ensure that its intermediaries comply with the credit laws. The court case is a result of a 2017 Royal Commission inquiry into Australia’s financial services industry, which exposed widespread misconduct in the sector.
ANZ Group’s Response
ANZ Group has stated that it has cooperated with ASIC during this process and is nearing completion of a customer remediation program. The bank has also made changes to its home loan processes.
ASIC’s Findings
ASIC has been investigating the country’s six largest banking service providers for charging fees for services that were not provided. Earlier on Friday, ASIC announced that these banks had paid or offered AUD 4.7 billion in compensation to customers who suffered losses due to these fees.
The compensation payments follow ASIC’s investigation into the banking sector, which revealed a range of misconduct issues, including charging customers for services that were not provided, and selling products that were not suitable for their needs.
