By Rishav Chatterjee
(Reuters) -Australian lender ANZ has been sanctioned for failing to stop or refund fees for dead customers and not responding to their representatives within a required time frame, a committee that looks at the banking industry's practices said on Tuesday.
The Banking Code Compliance Committee, a self-regulation body, had in June 2023 come out with its "Deceased Estates Report", which looks at how banks in Australia had complied with the required obligations. The BCCC had then began an investigation into three lenders, including ANZ Group.
The practice of continuing to charge fees from dead customers prominently featured during the Hayne Royal Commission, which was established in December 2017 by the Australian government.
"The decision to name ANZ for its non-compliance reflects the seriousness of its code breaches," BCCC chair Ian Govey AM said in a statement on Tuesday.
"Naming a bank is a sanction that we reserve for the most serious and systemic breaches."
ANZ acknowledged the findings of the report in an emailed response, adding that the lender has "significantly" improved the time it takes to provide information around a customer's accounts to their representatives.
ANZ has also already established a dedicated program to improve the experience for dead customers' representatives and has changed a number of processes and technology to manage these cases, it said.
Despite initially identifying the issues in early 2022, ANZ took over a year to implement solutions and then nearly 2 years to begin the customer remediation program.
The remediation program is still ongoing and expected to be finalised by July-end.
The lender should have done more to urgently remediate the affected customers, Govey said, adding, the remediation did not meet expectations.
ANZ will pay around A$3.3 million ($2.19 million) in remediation to 18,852 impacted customers, the committee said in its investigation report.
($1 = 1.5058 Australian dollars)