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

 

ANZ to pay $19 million in interest rate swaps case

ANZ to pay $19 million in interest rate swaps case


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.

The settlement will see ANZ establish a payment fund of $18.5 million, to be used to make payments to eligible customers (those who registered their complaints with the Commission). The Commission will also receive $500,000 towards its investigation costs, and some monies from the payment fund are able to be distributed to charitable organisations for the assistance of the rural community.

ANZ has also agreed to admit in High Court proceedings that it engaged in certain conduct that was misleading to some eligible customers. The Commission will be seeking High Court declarations that the bank’s conduct breached the Fair Trading Act 1986. A hearing of that application is likely to take place early next year.

The Commission’s investigation into ANZ looked primarily at whether the bank marketed interest rate swaps in a way that may have misled customers as to their benefits, risks and suitability.

Commerce Commission Chairman Dr Mark Berry said, “The Commission considers that ANZ’s behaviour led some customers to believe that margins on the loan connected with the swap would not change, early termination amounts would be similar to break costs for equivalent fixed rate term loans, and that swaps would be for them a good substitute for a fixed rate term loan. In reality, ANZ could, and in some instances did, increase margins, and early termination amounts could be significantly higher.”

The Commission’s conclusions have not been tested in court and ANZ says that it does not accept them.

“We believe that this settlement is a very good outcome, as contested court proceedings would have meant uncertainty and lengthy delays in achieving any possible payments. We are pleased to be able to deliver payments to eligible customers much more quickly than might be achievable through the courts. The payments to be made under the settlement are, in our view, a reasonable approximation of the potential losses that the Commission could have recovered on their behalf, if we had been successful at trial. These payments will include amounts that eligible customers incurred by way of extra margins and additional early termination amounts (for those who broke their swaps), or extra costs (for those who did not).”

“We are also pleased that ANZ has put its hand up and admitted that some of its conduct was misleading.”

The Commission‘s settlement agreement sits alongside a separate agreement between the ANZ and the Financial Markets Authority.

“Over the next week we will be contacting the 178 customers who may be eligible for a payment under this settlement. Payment offers will be made to these customers next year and we expect the funds to be distributed by the end of September 2015,” said Dr Berry.

Discussions with the other two banks (Westpac and ASB) investigated by the Commission in relation to interest rate swaps are continuing.

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 



Campaign For NZ Coastal Tankers : Says Fuel Security At Risk

Three unions representing New Zealand shipping crews are mounting a united campaign to protect New Zealand’s fuel security and save New Zealand coastal tankers... More>>



Tourism: Travel Bubble With Cook Islands Resumes

Cook Islands tourism restarts today, ending a five-month border closure due to COVID-19. Graeme West, General Manager Australasia for Cook Islands Tourism Corporation, said today’s first flight of quarantine-free travel from New Zealand to the Cook Islands is very significant... More>>

Plant & Food: Research And Lincoln University Part Of Game Changing Gene Discovery
Scientists from Plant & Food Research and Lincoln University have contributed knowledge integral to the discovery of a new gene described as a game changer for global agriculture.
The gene allows natural reproduction by cloning in plants... More>>



Statistics: Building Consents Hit New Highs In November
There were a record 48,522 new homes consented in the year ended November 2021, Stats NZ said today. This was up 26 percent compared with the year ended November 2020... More>>

Fonterra: Revises Milk Collection Forecast
Fonterra Co-operative Group Limited today revised the forecast for its 2021/22 New Zealand milk collections to 1,500 million kilograms of milk solids (kgMS), down from its opening forecast of 1,525 million kgMS... More>>



ComCom: Clearance Sought For Vocus / 2degrees Merger

The Commerce Commission has received an application for clearance in relation to a transaction that would see the merger of the Vocus Group with 2degrees. Vocus and 2degrees are both telecommunications providers that primarily supply retail fixed voice and broadband services... More>>