ANZ, one of Australia’s largest banks, is set to doll out nearly $8 billion in refunds to small business customers using the FI’s commercial card products.
Reports in Dynamic Business on Friday (Feb. 9) said the refunds will be paid out across 52,000 credit card accounts held by business customers as a result of failure to disclose fees and interest charges. The Australian Securities and Investment Commission said ANZ reported its failure to disclose, or its incorrect disclosure, of interest rates, the interest-free period, annual fees, overseas transaction fees, and more to their business customers using card products.
According to the ASIC, many of those users are small businesses, with some cases dating back as early as 2009. The agency noted that ANZ has since updated its procedures for disclosing fees and other information to its corporate clients.
News of the refunds comes as Australian regulators take a tougher stance on large banks, especially when it comes to small business services.
Last September, reports in Reuters said the nation introduced new rules on bank executives to cap their salaries, delay bonuses and take action if bank chiefs are found guilty of misconduct. The new rules follow allegations against The Commonwealth Bank of Australia of violating anti-money laundering rules.
A month prior, the Sydney Morning Herald reported that the ASIC and the Australian Small Business and Family Enterprise Ombudsman introduced other rules for banks to promote small business lending and prevent unfair contract agreements with SMBs. But Ombudsman Kate Carnell spoke out against the nation’s largest FIs, describing the process of getting them to comply with rules as “like pulling teeth.”
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“The banks’ initial underdone response to the legislation serves as a reminder that [they] were once again trying to ‘game’ the rules, and this erodes trust,” Carnell said in a statement at the time. “It’s hard to understand why all these things are like pulling teeth. It came into effect last November, and it has taken my office and ASIC until now to take them to where they are pretty close to complying with a law that has been in effect for eight months.”
