The FMA has filed High Court proceedings against ANZ New Zealand, alleging that it charged customers for insurance policies that they were ineligible for, and which offered no cover.
The FMA alleges that ANZ sold duplicate credit card repayment insurance (CCRI) policies with no additional cover or benefits to some customers, and failed to cancel CCRI policies for ineligible customers between April 2014 and November 2018. However, it also says these failures have been an issue since as far back as 2001, with the FMA’s proceedings reflecting the introduction of the Financial Markets Conduct Act 2013.
FMA general counsel Nick Kynoch said ANZ’s actions resulted in harm customers over a long period of time, and it is appropriate for the matter to be put before the courts, despite ANZ’s self-reporting.
The FMA alleges that ANZ contravened section 22 of the Financial Markets Conduct Act by making false and misleading representations around policy cover, and is seeking penalties and payment of costs.
“While ANZ has embarked on their own remediation programme, and ultimately self-reported this matter, the case points to a failure of internal systems and controls resulting in customer harm over a significant period of time,” Kynoch said.
“Self-reporting is expected, and is taken into account by the FMA when determining the appropriate regulatory outcome. In this instance, we felt it appropriate to put the matter before the courts.
“ANZ sold a product that, for some customers, offered no benefit.”
ANZ says it has identified 390 customers with more than one CCRI policy on their card, and a further 439 customers who were ineligible to claim on the policy.
The FMA’s proceedings are related to 307 of those customers with policies between April 2014 and September 2018. ANZ managing director retail and business banking said the bank was “very sorry” that this happened.
“We actively review our processes and systems to try and identify issues that could impact our customer,” Kelleher said. “Where we find problems, we work to fix them for our customers.”
