Credit card management software overstated the available balance and issued notifications showing that more money was available to customers than was the case.

Elsewhere in the systems, different software calculated the balances correctly - and then charge penalty fees to customers who had relied on the notification, treating them as having exceeded their credit limit to take unauthorised borrowing.

Individually, the bank said, when the errors were accounted for customers received an average of AUD45 to make good the error at a total cost of some AUD8.3 million.

The action was brought by the Australian financial services regulator, ASIC. In a press release ASIC said "he Court found ANZ breached the ASIC Act and the National Consumer Credit Protection Act by falsely indicating customers could obtain a cash advance from funds stated to be their ‘Available Funds’ without incurring fees and interest.

The Court found ANZ had not cleared deposits into the credit card accounts, meaning the ‘Available Funds’ amount was incorrect and was showing a larger amount than [that] available for withdrawal without incurring fees or interest. Customers who obtained a cash advance based on these available funds were hit with fees and interest."

ASIC describes what went wrong as follows: "The proceeding related to a situation where funds were deposited to a credit card account and displayed as available and then a cash advance was made on that account before the funds were processed."

So if we pick that apart, what it means is that there was a delay between deposits to cards and those deposits being applied to reduce the balance on the cards. In that "gap" users who checked their balances - which are one-line statements without analysis - did not know that the outstanding balance had not been reduced by the amount of the deposit.

Also, WMLR questions the use of the term "mislead" - what the bank did, as a result of an error in its systems was to provide false information.

ANZ's reaction to this problem also raised ASIC's ire: "The Court also found ANZ did not act efficiently, honestly and fairly by failing to take timely action to address the problem. ‘These are errors that we expect a bank to be aware of and fix in a timely manner. It should not have taken ANZ several years to address this issue."

"More than" 186,000 accounts were affected when customers who relied on the stated balance were charged cash advance fees between November 2018 and September 2021.

FURTHER READING

ASIC: https://media.anz.com/posts/2023/september/court-approves-anz-and-asic-…

ANZ: https://media.anz.com/posts/2023/september/court-approves-anz-and-asic-…