ANZ to credit customers $10m after loan interest mix-up

Wednesday, 9 May 2018

ANZ says no customers will be left disadvantaged.

About 100,000 ANZ home, personal and commercial loan customers have underpaid the interest on their loans because of a problem with a bank calculator.

ANZ spokesman Stefan Herrick said, as part of consumer lending law changes in June 2015, the bank introduced a loan calculator to calculate customer repayments and loan terms when people asked for changes to their loans.

'We identified there was a problem with the loan calculator in March 2016, which meant we left out some interest customers were due to be charged after their loan was changed.'

The bank had looked into the issue for the customers that contacted it, fixed the calculator and worked to understand who else was affected and how, he said. Audit and accounting firm Deloitte was asked to review the situation.

'Once we had a clear picture of what had happened, how our customers were affected and how we would put it right, we contacted the Commerce Commission, in June 2017. We have been openly engaging with them as we've worked through putting our customers right.'

The calculator did not account for accrued interest between the first day of each month and the date the loan was changed during the month.

Customers paid slightly less interest than they should have between the date the loan was changed and when they next changed it. They paid less than they should have off their loans, so a greater balance compounded to earn interest through the rest of the life of the loan.

'The error is no more than a month's interest for anyone concerned. If we'd included the interest, customer repayments would have increased by, on average, $2 a month,' Herrick said. 'No customers will be disadvantaged by this.'

Interest is being credited back to customers' loans.

'This means customers will pay less than what they had agreed to under their loan agreement with us. We're putting customers back into the position they would have been if the error in the calculator hadn't happened, with ANZ wearing the cost while their loan was impacted,' Herrick said.

'To work out the credit, we've worked out how customer loans were affected. We've worked out what the customer paid while their loan was impacted by the calculator problem, as well as what they would have paid, if we'd included the interest when calculating their repayments. We're giving the customer a credit for that amount of interest. We're also crediting any extra interest the customer may have been charged because they were underpaying. We think that's the right thing to do.'

The bank will credit customers with a total of about $10 million.

A Commerce Commission spokesman confirmed the bank had reported the issue in June last year.

'We have an open investigation into the matter and cannot comment further at this time.'