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08 September 2025

ANZ Bank New Zealand Limited

Background

ANZ Bank New Zealand Limited (Document) has been subject to a series of regulatory investigations, enforcement actions, court proceedings, and settlements with the Financial Markets Authority (FMA) and the Commerce Commission over the past decade, primarily relating to misleading conduct, fair dealing breaches, and disclosure issues under the Financial Markets Conduct Act (FMCA), Financial Markets Act 2011, and the Fair Trading Act 1986.

Key Outcomes and Financial Penalties

  • September 2025: ANZ admitted breaching fair dealing provisions of the FMCA through an enforceable undertaking and agreed to pay $3.25 million to the Crown in lieu of a pecuniary penalty. The breaches involved:
    • Incorrectly applying fees and interest to customer accounts for unarranged overdrafts.
    • Improperly seeking repayment of mortgage incentives that should not have been clawed back.
  • March 2021: The Auckland High Court ordered ANZ to pay a $280,000 civil penalty for making misleading representations to 307 customers regarding CCRI insurance policies that provided no effective cover or benefit. The Court emphasised deterrence and the obligation on large financial institutions to maintain robust systems and processes.
  • December 2014: ANZ entered into a $19 million settlement with the Commerce Commission concerning misleading conduct in the marketing and sale of interest rate swaps to rural customers between 2005 and 2009. The FMA resolved related issues through a settlement agreement and enforceable undertaking.

Legal Findings and Regulatory Themes

  • Courts repeatedly found that ANZ engaged in misleading conduct, including overstating benefits and understating risks in complex financial products, particularly interest rate swaps and insurance products.
  • Judicial commentary highlighted that consumers are entitled to rely on the accuracy of bank communications and systems without needing to independently verify each transaction.
  • The enforcement actions demonstrate a consistent regulatory focus on fair dealing, truthful representations, and systemic governance failures rather than isolated errors.

Disclosure and Judicial Review Proceedings

  • Between 2017 and 2019, ANZ challenged the FMA’s authority to disclose documents obtained under statutory powers.
    • The High Court initially found in favour of ANZ (2018).
    • The Court of Appeal overturned that decision (March 2019).
    • The Supreme Court dismissed ANZ’s application for leave to appeal (April 2019), awarding costs to the FMA.

Overall Assessment

Collectively, these matters reflect long-standing and recurring compliance and conduct issues across multiple product lines and time periods. Regulatory responses have included substantial financial penalties, enforceable undertakings, and judicial clarification of the FMA’s powers. The case history underscores heightened expectations on large financial institutions to ensure accurate representations, fair treatment of customers, and effective internal controls.

Timeline

September 2025:

ANZ admits breaching fair dealing laws (Financial Markets Conduct Act) in an Enforceable Undertaking and agrees to pay a total of $3.25 million to the Crown, in lieu of a pecuniary penalty.

The first breach was for wrongly applying fees and interest to customers’ accounts for unarranged overdrafts.

The second fair dealing breach of the FMCA by ANZ involved claiming repayment of mortgage incentives previously given to customers when it should not have.

March 2021

Auckland High Court ordered ANZ to pay a $280,000 civil penalty for breaching the FMC Act by making misleading representations to 307 of its customers. Justice Muir noted the importance of deterrence in the civil penalty regime, noting: “that it creates a strong incentive for financial institutions, and particularly large and well-resourced ones like trading banks, to maintain adequate processes and systems.”

ANZ previously admitted to breaching the FMCA after the FMA filed proceedings in June 2020. The Financial Markets Authority (FMA) alleged ANZ charged certain customers for CCRI policies that offered no cover or benefit. The FMA claimed that ANZ breached section 22 of the FMCA by making false and misleading representations about the cover conferred by those policies.

Justice Muir said consumers are entitled to trust the accuracy of any bank’s communications and systems, noting: “Consumers cannot be ‘confident’ in their participation [of financial markets] if they are required to double check the precise details of every transaction with their bank,” he said.

June 2020

FMA files High Court proceedings against ANZ alleging the bank charged some customers for CCRI policies that offered those customers no cover. FMA claims ANZ contravened section 22 of the FMC Act by making false and misleading representations about the cover of the policies.

The New Zealand Commerce Commission and FMA investigated alleged contraventions of the Fair-Trading Act 1986 by ANZ in relation to the marketing, promotion and sale of interest rate swaps to rural customers from 2005-2009.

28 May 2015

The High court judgment resulted in the following declaration:

Between on or about July 2005, and 31 March 2009, ANZ Bank New Zealand Limited breached s 9 of the Fair Trading Act 1986, in that, being in trade, it engaged in conduct that was misleading in relation to some of the customers listed in Schedule 1 to the Statement of Claim, in that it understated some of the risks and/or overstated some of the benefits of interest rate swap arrangements to those customers.

3 December 2014

The Commerce Commission has reached a $19 million settlement with ANZ Bank New Zealand Limited (ANZ) in relation to the marketing, promotion and sale of interest rate swaps to rural customers between 2005 and 2009.

Consequently, FMA has also agreed to resolve issues by the settlement agreement and enforceable undertaking.

ANZ Bank New Zealand Ltd challenged the FMA's decision to disclose to third parties, documents the FMA has obtained from ANZ through the exercise of its statutory powers.

12 April 2019- Supreme Court

The applications for leave to appeal are dismissed. Costs of $3,500 are awarded to the respondent (FMA).

5 March 2019- Court of Appeal

The High Court decision was overturned by the Court of Appeal. The Court of Appeal held that there was a “good deal of evidence indicating that the first purpose was a genuine purpose”.

ANZ sought leave to appeal the High court decision to the Supreme Court and to maintain confidentiality over the judgment.

17 April 2018- High court

The High Court held for ANZ that the proposed disclosure was outside the powers of the FMA. It did not consider that there were legitimate reasons for disclosure.

November 2017

The High Court heard a judicial review application and breach of confidence claim by ANZ against the FMA, concerning the interpretation of our powers under s59 of the Financial Markets Act 2011.