'Grubby' ANZ given huge fine for ripping off government, customers

Serial offender ANZ has been fined a record $240 million for “widespread misconduct” that impacted almost 65,000 customers, including many of its most financially vulnerable borrowers.

ANZ has agreed to pay the penalties that were determined by the Australian Securities and Investments Commission (ASIC), although it will still need to be approved by the Federal Court before official enforcement.

The latest finding against ANZ towers above its other repeated breaches and fines incurred since 2017, during which time it has been ordered to pay $74.9 million for seven separate misconduct matters that ranged from home loan to insurance penalties for ripping off customers.

At the centre of the latest tarnish on ANZ’s reputation and bottom line was its “unconscionable conduct” in incorrectly reporting bond trading data to the federal government to the tune of tens of billions of dollars.

You’re not doing what you said you’re going to do. That’s grubby.

- Joe Longo, ASIC

ASIC said it also engaged in “widespread misconduct” across products and services impacting nearly 65,000 customers.

Joe Longo, Chair of ASIC, said “ANZ betrayed the trust of Australians.”

“Banks must have the trust of customers and government.

“This outcome shows an unacceptable disregard for that trust that is critical to the banking system,” Mr Longo said.

“There are fundamental issues with ANZ’s risk and compliance culture that require the board’s and executives’ urgent attention.”

The total fine comprised $115 million related to its retail operations, with the rest assigned for its bond reporting failures.

Among those hurt the most by ANZ’s poor corporate behaviour were those whose hardship notices to the bank were ignored as they continued to receive default and demand notices.

ASIC alleges that ANZ failed to respond to 488 customers who submitted financial hardship notices to the bank between May 2022 and September 2024. In some cases, ANZ took more than two years to respond to customers. 

“Personal circumstances reported by customers when providing hardship notices to the bank included unemployment, serious medical issues, bereavement and family violence,” ASIC noted.

“In some cases, ANZ took action to recover debts from customers even when they had not responded to the customers’ hardship notices, including issuing default and demand notices, and referring customers to external debt collection agencies.”

The near quarter billion dollar finding against ANZ on Monday (15 September) over its mismanagement of such a broad range of its services comes just days after it announced it would be cutting 3,500 jobs and an additional 1,000 contractor positions over the next 12 months.

Mr Longo didn’t hold back the punches, describing ANZ’s actions as “grubby”.

“Time and time again, ANZ has fallen short (and) today many Australians will rightly be questioning their trust in ANZ.”

In relation to the misreporting of bond turnover that ANZ was unintentional, Mr Longo was stern.

“As far as the unconscionable conduct is concerned it was clearly grubby; I mean let’s be frank, they said they were going to be frank in their communication to AOFM; they weren’t.

“They said they were going to follow their own policy and procedures; they didn’t.

“They well understood the inherent conflict of being a duration manager, while also discharging their responsibilities to AOFM.”

Challenged over his choice of adjective, he doubled down in the Sydney press conference.

“I’ve just been asked a moment ago what word could I use to sort of have resonance with ordinary Australians.

“Well, I think that’s grubby. You’re not doing what you said you’re going to do. That’s grubby,” Mr Longo said.

ANZ Chair Paul O’Sullivan told a press conference that ANZ had apologised to the Australian Office of Financial Management (AOFM) for “inadequate communication”.

“On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.

“The failings outlined are simply not good enough and they reinforce the case for change,” he said in a statement.

“It is my expectation that we see measurable improvements across the bank to better protect and care for our customers and to create a more sustainable business.”

Prior misconduct and punishments meted out to ANZ

Prior misconduct by ANZ across seven matters of concern includes:

• In 2023, ANZ was ordered to pay a $900,000 penalty for breaching continuous disclosure laws when undertaking a $2.5 billion institutional share placement in 2015 in circumstances where the maximum penalty applicable at the time was $1 million.
• In 2023, ANZ was ordered to pay a $10 million penalty for contravening the Credit Act by accepting information and documents from unlicensed third parties in its home loan introducer program.
• In 2023, ANZ was ordered to pay a $15 million penalty for breaching the Credit Act and the ASIC Act for misleading customers about their available funds for certain credit card accounts, resulting in fees and interest charges.
• In 2022, ANZ was ordered to pay a $25 million penalty for 155,868 contraventions of the ASIC Act, Corporations Act and Credit Act for failing to provide promised benefits to customers with offset transaction accounts or under a ‘Breakfree’ package over 20 years.
• In 2020, ANZ was ordered to pay a $10 million penalty for breaching the Corporations Act and the ASIC Act in relation to 327,898 instances of unconscionable conduct over periodic payment fees charged to customers until September 2015.
• In 2018, ANZ was ordered to pay a $5 million penalty for breaching responsible lending provisions in the Credit Act for failing to verify customer income in its former Esanda car finance business.
• In 2017, ANZ was ordered to pay a $10 million penalty for contraventions of the Corporations Act and the ASIC Act for attempting to manipulate the bank bill swap reference rate (BBSW) on ten occasions over an 18-month period.