ASIC acts against ANZ for breaching responsible lending laws in its former Esanda car finance business

ASIC today announced a package of regulatory actions against Australia and New Zealand Banking Group Ltd (ANZ) for loans approved through its former car finance business Esanda, including around $5 million in remediation. The loans were submitted by three broker businesses to ANZ.

Civil penalty proceedings

ASIC has commenced civil penalty proceedings in the Federal Court against ANZ, in which ANZ has admitted 24 contraventions of the responsible lending provisions of the National Consumer Credit Protection Act 2009 (Cth) for car loans approved by Esanda from three broker businesses.

ASIC alleges that between 25 July 2013 and 12 May 2015, ANZ failed to meet its responsible lending obligations when relying only on payslips included in 12 car loan applications to verify the consumer's income, in circumstances where it knew that payslips could be easily falsified and it had reason to doubt the reliability of information from the particular broker businesses.

This action relates to ANZ's own responsible lending obligations, which require lenders to take reasonable steps to verify the information provided by borrowers. ASIC has separately taken action against the broker businesses that were involved in submitting false documents to ANZ (see below). 

ASIC and ANZ have filed a Statement of Agreed Facts and Admissions in the Federal Court. They will make joint submissions that an appropriate penalty to be paid by ANZ is $5 million. The penalty amount payable by ANZ will be determined by the Court.

The Court has listed the proceedings for a first Case Management Hearing on Friday 2 February 2018.

Remediation

ANZ will remediate approximately 320 car loan customers for loans taken out through three broker businesses from 2013 to 2015, totaling around $5 million. The loans are likely to have been affected by fraud. ANZ will:

ANZ is expected to commence contacting customers eligible for remediation in February 2018. Customers can contact ANZ on: 132 373.

ASIC acknowledges ANZ's cooperation with its investigation and in resolving its regulatory concerns.

Background

ASIC has taken separate actions in relation to the three brokers who submitted false documents to ANZ: