FMA filed proceedings against ANZ for false and misleading representations over credit card insurance charges.
ANZ Bank New Zealand Limited charged 307 customers for card repayment insurance (CCRI) policies that offered no cover. The FMA brought proceedings against ANZ, alleging the bank had breached the fair dealing provisions of the Financial Markets Conduct (FMC) Act. ANZ was ordered by the High Court to pay a $280,000 civil penalty.
The FMA proceedings contained two causes of action. Firstly, that ANZ issued duplicate CCRI policies to some customers, which provided no additional benefits or cover, and charged premiums on those policies, during the period April 2014 - November 2019. Secondly, ANZ issued and failed to cancel CCRI policies for ineligible customers, also charging premiums on those policies, during the period 1 April 2014 – May 2018.
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.
