Negligent credit card practices have seen two of the largest banks in
Australia return more than $20 million in refunds and remediation following
intervention by the Australian Securities and Investment Commission (ASIC).
The announcement comes as the big four banks ready to front the $75 million Banking Royal Commission in the coming week, and as the dust from a
688-page Productivity Commission report painted the credit-card market as lacking competition.
Westpac and ANZ have had to issue millions in refunds and remediation to
credit card holders, capping off a protracted ASIC investigation into loose
lending practices that began in 2014.
Westpac's remediation package totals $11.3 million for inviting people to
increase their card limits without checking they could afford the
The company says in a statement: "The issue related to whether employment status and income had been
directly reconfirmed in the credit card credit limit increase application
"Following an industry wide review in 2014 and feedback from ASIC, Westpac
reviewed and amended its application forms and processes in March 2015."
The money paid by the bank includes $3 million in refunds and interest, as
well as $8.3 million in waived credit card balances.
But another of the big four banks is due to issue refunds to
tens-of-thousands of customers.
ANZ will pay $10.2 million to 52,135 card holders for failing to inform
them of certain terms and conditions.
Holders of ANZ's Business One credit card – many of whom are small
business owners – were either not told of or were incorrectly informed of
the interest rates, the interest-free period, the annual fee,
and of the terms to do with overseas transactions.
The refunds – to be paid with interest – will be issued to ANZ customers
who were affected as early as 2009.
Representatives of ANZ were not immediately available for comment.
The refunds come right after a Productivity Commission report found most Australians are mystified by the 250
different credit cards on the market, leaving them lost
in the oversupply of choice, especially as some have only "marginal
Reforms have been introduced into parliament to stop providers from
volunteering increases to people's credit cards, whether the holders have
provided consent or not.
They will also need to perform credit checks and make sure the
repayments can be made within a period of time determined by the corporate