Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

ANZ fined $7,500 for misleading MasterCard offer


ANZ Bank fined $7,500 fine for misleading MasterCard offer: campaign write-off costs $2.3million

ANZ Bank was fined $7,500 plus $1,130 costs in the Wellington District Court yesterday for breaching the Fair Trading Act in relation to a promotion offering nearly 10,000 of its existing customers an ANZ MasterCard with a pre-approved $5000 limit. In addition, Judge Tuohy acknowledged the bank had to write off $2.3million as a result of the campaign as a whole and had suffered the publicity attached to a prosecution.

Promotional material addressing each customer by name promised, “All you have to do is take up an ANZ MasterCard. We’ve already pre-approved you for a $5,000 limit, just complete the enclosed form…”

The Commerce Commission initiated the investigation based on information provided by a Citizens Advice Bureau that a customer who received this offer and sent away an enclosed application form for the card subsequently had her application declined. This was because her income level did not meet minimum credit criteria.

The investigation revealed that ANZ’s method for identifying eligible customers was erroneous and that 850 of the original 9,998 customers targeted did not meet minimum criteria based on their income level.

In his sentencing, Judge Tuohy said: “I have no doubt that the average New Zealand bank customer would read the letter as an unconditional offer of an ANZ MasterCard with a $5,000 credit limit, which could be accepted merely by completing the application form. Indeed that was what the Bank intended it to be.

The Bank argued that the promotion was not misleading because its letter referred to terms and conditions stated in a sentence on the application form. Judge Tuohy, however, stated that “As far as the sentence in the application form is concerned, in my view the average New Zealand bank customer would see it as nothing more than the sort of standard small print jargon almost invariably included in standard form documents produced by financial institutions.”

“I am satisfied that the representation made was both false and misleading. In totality, the mistake is too extensive and too elementary in several respects to be described as reasonable,” said Judge Tuohy.

Commerce Commission Director of Fair Trading Deborah Battell said that while the breach was not necessarily wilful, the conviction sent two clear messages to businesses. “Firstly, businesses must clearly bring any conditions attached to an offer to a customer’s attention.” “Secondly, blaming a breach on a series of mistakes is not a reasonable defence. The mistakes that caused the ANZ’s problem demonstrated a clear lack of quality control in terms of compliance with the Fair Trading Act.”

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>

ALSO:

Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>