“Systems errors” reportedly resulted in ANZ Bank incorrectly charging customers cash advance fees and interest on withdrawals and transfers for several years, corporate regulator ASIC has charged.

ASIC has commenced civil penalty proceedings against ANZ for allegedly “misleading its customers as to the available funds and balances in their credit card accounts”.

The watchdog contends that, between May 2016 and November 2018, around 165,750 ANZ customers were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts based on the display of an incorrect account balance, visible via the ANZ website, ANZ App and at ATMs.

Despite being aware of the problem since at least 2018 (and potentially as far back as June 2015), ANZ has failed to adequately fix it, according to the regulator. ASIC further contends that customers continue to be affected by the problem.

ASIC deputy chair Sarah Court said the bank had, “over a long period of time… overstated the available funds and balances on credit card accounts”. Customers who relied on this information when making withdrawals were then charged fees and interest based on what was actually available in their accounts.

“In some cases, single customers were charged thousands of dollars in fees while the average cash advance fees and interest charged per affected account was $47,” Court said.

The error was a discrepancy between the actual amount available for withdrawal and the amount displayed on the ‘Available Funds’ and ‘Current Balance’ when customers made a deposit into their credit card accounts. Any credits applied to account balances were, in fact, “not immediately available for withdrawal by the customer without any adverse consequence, even though the account appeared to be in credit balance”, ASIC noted in its Concise Statement to the Federal Court.

“In this way, ANZ expressly and/or impliedly represented when credit amounts shown as ‘Current Balance’ and ‘Available Funds’ for a customer’s credit card account were communicated, that the Current Balance (being the lower amount) could be withdrawn by the customer without incurring any fees or interest or any other adverse consequence.”

ASIC also noted that ANZ’s website (www.anz.com) had, until around 23 September 2021, stated that the ‘Current Balance’ incorporates all transactions that have been processed to the account and that it may include funds that have been deposited but not yet cleared and therefore are not available for withdrawal.

ASIC deputy chair said the “alleged misconduct is the result of system errors within ANZ and a lack of effort to comprehensively fix these issues.”

ASIC also noted that while the bank’s errors had caused “significant financial losses” for affected customers, the bank had failed to implement any fix to its systems to prevent the issue from recurring or causing further customer harm.

While ANZ remediated over $10 million to customers who were affected up until 17 November 2018, the problem was continuing, ASIC said, with the regulator seeking orders from the Court that customers who were wrongly charged since 2018 also would be remediated.

The alleged actions contravene misleading or deceptive conduct provisions of the ASIC Act and of the general conduct obligations owed by credit licensees under the Credit Act.

ANZ acknowledged the civil penalty proceeding, though – as the matter is before the Court – has added no further comment.

The Federal Court has yet to schedule a date for the first case management hearing.