The Financial Markets Authority (FMA) has filed High Court proceedings against ANZ Bank New Zealand (ANZ), alleging the
bank charged some customers for credit card repayment insurance (CCRI) policies that offered those customers no cover.
The FMA proceedings have two causes of action. Firstly, that ANZ issued duplicate CCRI policies to some customers, which
provided no additional benefits or cover, and charged premiums on those policies, during the period April 2014 and
November 2019. Secondly, ANZ issued and failed to cancel CCRI policies for ineligible customers, also charging premiums
on those policies, during the period 1 April 2014 – May 2018. These two issues relate back to at least 2001. However,
the FMA claim reflects the introduction of the Financial Markets Conduct Act 2013, which came into effect from April
The FMA claims that ANZ contravened section 22 of the Financial Markets Conduct Act by making false and misleading
representations about the cover of the policies. The regulator is seeking declarations of contravention of the Financial
Markets Conduct Act, pecuniary penalties and costs.
ANZ first identified the duplicate policy issue around September 2017 and the ineligible customers issue was identified
around May 2018. ANZ did not disclose either issue to the FMA or Reserve Bank during their joint conduct and culture
review of New Zealand’s retail banks from May to June 2018. The review requested that ANZ disclose “any work underway to
remediate any identified issues where conduct by your firm has resulted in detrimental outcomes for customers.”
ANZ first notified the FMA of both issues in June 2019.
FMA General Counsel, Nick Kynoch said, “while ANZ has embarked on their own remediation programme, and ultimately
self-reported this matter, the case points to a failure of internal systems and controls resulting in customer harm over
a significant period of time. Self-reporting is expected, and is taken into account by the FMA when determining the
appropriate regulatory outcome. In this instance, we felt it appropriate to put the matter before the courts.
“ANZ sold a product that, for some customers, offered no benefit.”
CCRI is a form of insurance which covers some or all of a customer’s outstanding credit card repayments in certain
circumstances, including in the event of a customer’s bankruptcy, redundancy, injury, illness or death.