Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

ANZ paying hundreds of millions in compo

AAP  |  28 Nov 2018Text size  Decrease  Increase  |  
Email to Friend

ANZ is paying hundreds of millions of dollars in compensation to customers over a variety of account processing errors.

ANZ chief executive Shayne Elliott admits the bank had applied "bandaid" solutions that did not work to fix the problems.

The five different errors each led to large numbers of customers being overcharged or not receiving agreed discounts or benefits in relation to their home loans.

Shayne Elliott ANZ royal commission

ANZ chief executive Shayne Elliott admits the bank had applied 'bandaid' solutions

Mr Elliott said the total number of accounts affected was approaching two million, but noted many would be double counted such as where a customer received both credit card and home loan remediation.

"It is hundreds of millions of dollars when it is added up," he told the banking royal commission on Wednesday.

ANZ last month announced a $374 million provision for refunds to customers and related remediation costs over its product issues and inappropriate advice or fees-for-no-service.

"Some of that is money that will go back to customers. That's theirs," Mr Elliott said.
The rest reflected the cost of running the remediation programs.

Mr Elliott said ANZ did not adequately address the processing errors, blaming a complex organisation structure.

"When you run a confederated business model, when things break in them, when errors happen, it's less likely they get accelerated at a board or executive committee.

"... If issues are not raised to the appropriate level, there is an inability to connect the dots and see that something is systemic here."

Mr Elliott agreed that meant it was more likely that a bandaid solution was applied.

He said ANZ was simplifying its organisation.

The royal commission heard ANZ was one of two financial services organisations that the corporate regulator said viewed customer remediation as a distraction in the past.

A January 2018 ANZ document said: "It was seen as a distraction, at the expense of earning revenue, and therefore not always given the highest priority."

Mr Elliott said it was a mid-level executive's observations it conceded it was a valid perspective.

"There will have been an element of that, most certainly.

"I do not believe it was pervasive across the organisation."

Mr Elliott said at times ANZ had become far too focused on revenue as a definition of good behaviour or good outcomes.

"People who drove good revenue outcomes were seen to be doing a good job, and we paid less attention to how they achieved those outcomes," he said.

 

provides Morningstar with market news.

AAP logo

© 2020 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend