Australian Securities and Investments Commission (ASIC) has announced that ANZ and Westpac will give a combined $21 million back to credit card customers, following concerns about their lending practices.
ANZ Business One business credit card refunds
ANZ will refund $10.2 million to 52,135 business credit card accounts, after it “failed to properly disclose” the following for the Business One business credit card:
- Applicable interest rates
- The interest-free period
- The annual fee
- When an overseas transaction fee might apply
- The amount payable for overseas transactions with foreign merchants or financial institutions.
These eligible customers have been contacted by ANZ and will receive a refund with interest.
Westpac refunding customers encouraged to increase credit card limits
Westpac is to refund $11.3 million to around 3,400 credit card customers, following ASIC enquiries into its credit card limit increase practices. This includes around $3 million back to customers for fees and interest, and waiving $8.3 million in credit card balances.
The crackdown follows a 2014 review by ASIC focusing on credit card providers’ invitations to customers to increase credit card limits. As a result of increasing these credit card limits, Westpac customers were found to be now experiencing “financial difficulty”.
Since this review, the Government has introduced reforms into Parliament to prohibit credit card providers sending card limit increase invitations, “regardless of whether the consumer has provided their consent”.
History repeating itself?
Only two months ago ASIC announced that Westpac was to refund $11 million back to 13,000 owner-occupier home loan customers.
Further, in 2017 the big four banks (ANZ, CBA, NAB and Westpac,) as well as AMP, were requested to pay almost $220 million to customers in refunds and interest.
At the time, ASIC Acting Chair Peter Kell stated that “all banks should be reviewing their systems to ensure that they minimise the chance of any such errors occurring, and that any risks to customers are identified early.
“If past errors are identified, remediation needs to be timely, transparent and effective,” said Mr Kell.
Hopefully banking customers will see a change in these systems and practices in 2018.