ANZ accused of billing 460,000 customers for moving money between accounts

SYDNEY: The Australian corporate regulator filed suit against the country's third-largest bank on Thursday, accusing it of knowingly breaking the law by charging customers fees to transfer money between their accounts for more than a decade.

In the Federal Court civil action, the Australian Securities and Investments Commission (ASIC) said Australia and New Zealand Banking Group Ltd wrongfully took fees from more than 440,000 retail customers and 18,000 business customers for moving money between their accounts from 2003 to 2016.

The bank earned more than A$35 million ($24 million) in fees from the practice, although "ANZ's inadequate record-keeping practices" meant the exact amount could not be established, the filing said.

In a statement, ANZ said it was considering the ASIC lawsuit but "categorically denies any deliberate wrongdoing and intends to vigorously defend any such allegation".

The court filing said that even after ANZ learned in 2011 that charging the fees may be illegal, it did not tell the authorities until 2014 and only stopped charging the fees two years after that.

"ANZ customers suffered financial loss as a result", said the court filing, which ASIC made public.

The lawsuit is ASIC's second against ANZ in 10 months as regulators ratchet up scrutiny of big lenders following a national inquiry into financial misconduct that drew complaints authorities were too easy on the A$140 billion sector.

In a separate suit, ASIC has accused ANZ, Citigroup Inc  and Deutsche Bank AG of colluding to withhold information from shareholders in a A$2.5 billion share issue in 2015. The banks are defending that case.

ANZ has already faced a class action lawsuit from customers of the bank over the transfer fees, paying out A$1.5 million last year to settle the case, ASIC said. The bank has repaid customers about A$28 million for wrongfully charged fees and has kept another A$5 million owed to 57,000 customers, because it cannot locate them, the lawsuit added.

In a statement, ASIC said it wanted penalties applied to the 1.3 million times that the bank wrongfully took fees, and that each offence could bring a fine of up to A$2.1 million.