The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Australia and New Zealand Banking Group (ANZ) has come under intense scrutiny for a grave oversight: charging fees to the estates of deceased customers.
This makes ANZ the second of Australia's Big Four banks to face formal action from the Banking Code Compliance Committee (BCCC) within a single week.
The BCCC's accusations are centered on ANZ's failure to cease or refund fees charged to deceased customers' estates in a timely manner. The committee also noted that ANZ did not respond to inquiries or instructions from the representatives of these estates within the 14-day period mandated by the 2019 Banking Code of Practice.
The violations, spanning more than four years from July 2019 to September 2023, involved ANZ's inability to quantify the extent to which it was in breach of these code obligations. The bank has since committed to remediating $3.25 million to around 19,000 affected estates.
This action against ANZ follows closely on the heels of a similar sanction imposed on Westpac for its poor handling of a regional branch closure. According to the BCCC, another unnamed bank was given a formal warning for similar issues, though the financial impact and number of affected estates were significantly lower.
The BCCC listed several reasons for its stringent action against ANZ:
ANZ's inability to accurately monitor and report the 14-day obligation breaches.
Delayed internal measures to prevent additional breaches after an audit in September 2022.
Slow response in addressing customer issues identified back in February 2022, with remediation expected to be completed only by July 2024.
Delays in responding to estate representatives, exacerbating the emotional and logistical burdens on bereaved families.
Significantly, the BCCC highlighted that in June 2023, ANZ introduced an automated tool to waive fees upon receiving death notifications. However, this measure came more than a year after the initial problem identification.
The committee pointed out that more than 7,000 delayed cases are awaiting resolution, each requiring manual review to identify potential breaches. ANZ plans to send approximately 10,604 apology letters and pay financial compensation totaling around $667,915 to affected representatives.
BCCC Chair Ian Govey expressed considerable concern over ANZ's Code breaches, describing them as intensely problematic and warranting the severe sanctions imposed. Govey criticized ANZ’s slow remediation process, saying it "did not meet expectations" and that the bank "should have done more to address this more quickly."
The sanction stems from a 2023 inquiry by the BCCC into banks' adherence to the deceased estates provisions in the Banking Code of Practice, implemented to ensure institutions follow best practices in handling such sensitive matters.
Last week, financial regulator ASIC approved updates to the Banking Code that include revised steps for securing accounts following customer deaths. These changes are slated to take effect after 28 February 2025.
This evolving regulatory landscape underscores the importance of timely and compassionate handling of financial matters for deceased estates, an area where ANZ has evidently fallen short.
The Australian Prudential Regulation Authority (APRA) has announced a significant policy change aimed at curbing potential risks in the housing market. Effective February 2026, APRA will implement a cap on high debt-to-income (DTI) home loans, limiting such loans to 20% of new home lending portfolios. This move is designed to address concerns over escalating property prices and accelerated credit growth. - read more
The Commonwealth Bank of Australia (CBA), the nation's largest lender by market value, has reported a modest increase in its first-quarter cash profit, reaching approximately A$2.6 billion-a 2% rise from the previous year. This growth is primarily attributed to strong performances in home loans and household deposits, which saw increases of A$9.3 billion and A$17.8 billion, respectively. - read more
In response to stringent lending criteria, a significant number of Australians are actively reducing their spending and personal debt to improve their chances of securing or refinancing home loans. A recent survey conducted by Finder, involving over 1,000 participants, revealed that 18%-approximately 3.9 million people-have taken such measures over the past five years to meet lender requirements. - read more
Financial hardship occurs when an individual is unable to meet their financial obligations due to a variety of circumstances. This could stem from a loss of income, unexpected expenses, or rising living costs that outweigh financial resources. - read more
Maintaining a good credit score is crucial for financial health. In Australia, a solid credit score can unlock better interest rates, higher credit limits, and improve your chances of loan approval. - read more
Pre-approval loans are a preliminary step in the loan approval process. They provide borrowers with a conditional commitment from a lender, indicating the maximum amount they are willing to lend, based on the borrower’s financial situation. - read more
Need Help Finding a Loan?
Find out now if you qualify and compare
rates, offers and options from multiple lenders - without a credit check!
All finance quotes are provided free (via our secure server) and without obligation. We respect
your
privacy.
Knowledgebase
Collateral: An asset that a borrower offers as a way for a lender to secure the loan.
