This morning, Australia and New Zealand Banking Group Limited [ASX:ANZ] shares dropped 1.25%.
ANZ, the third largest bank in Australia, is now trading at $27.22 a share and has a market cap worth $78.284 billion.
ANZ to pay $3 million while pledging to overhaul its financial advice business
ANZ have failed to give more than 10,000 of its customers annual reviews of their investments.
The Australian Securities and Investments Commission (ASIC) has stated that ANZ agreed to compensate their Prime Access customers, who didn’t receive any of the documented reviews that they had paid for in the years prior.
So far ANZ has paid a total of $46.81 million in remedies.
Their commitment attempts to place other financial advice businesses under review for incompetent services.
Case studies were conducted to focus on customer service failures from CBA and the AMP.
ASIC have come out stating that ANZ had not yet provided annual reviews to customers who paid money for them.
The Sydney Morning Herald reported that ASIC’s deputy chairman, Peter Kell, stated:
‘ASIC considered it critically important that improved systems and procedures be put in place to ensure this breach of trust could not re-occur. This enforceable undertaking with ANZ will deliver on that commitment.’
ANZ’s senior management department are required to provide audited evidence to prove that the bank has provided the necessary documentation to customers, as well as other evidence that they have acted within the banks compliance systems.
ANZ are also required to pay a total of $50 million in fines to compensate for its 24 breaches of responsible lending laws.
The bank’s current general manager, Guy Mendelson, could be seen as responsible for the payslip fraud. However, Mendelson stated that he wasn’t in the business at that time, so he can only offer little comment on the matter.
For Markets & Money
PS: Australia’s Big Four banks are heavily sensitive to the real estate market. Is this a source of risk for ANZ? Money Morning’s Terrence Duffy explains more in his free report ‘Australian Real Estate Game Plan’.