Anz Refunds $45m After Glitch

The Age

Saturday May 20, 2006

By MARC MONCRIEF, BANKING REPORTER

BANK fees are under attack from government and retailers after one of Australia's largest banks was forced to refund consumers $45 million.

ANZ spokesman Paul Edwards said that 200,000 non-ANZ customers who had used Mastercard credit cards on ANZ card machines between Friday and Monday last week had been double-charged as a result of a computer glitch.

Retailers bore the brunt of the mistake, with angry customers complaining to them about being ripped off.

Mr Edwards said the mistake had been corrected, customers would be reimbursed and no interest would be charged on the false transactions.

"Everything works the way it should 99 per cent of the time but that's not good enough," Mr Edwards said. "It's especially embarrassing because they aren't even our customers."

Banks own the EFTPOS and credit card swipe machines at shop counters.

Federal Treasurer Peter Costello yesterday demanded that banks abolish or greatly reduce fees imposed on customers who switch banks. These can amount to thousands of dollars.

Mr Costello has a report from banks on the fees and vowed to take further action to see they are slashed to "low to zero".

"I want low exit and entry fees so that people can switch institutions; so that when they get dissatisfied they can take their business elsewhere," he said.

"Banks are making unbelievable profits at the moment. I want people to be able to walk away from banks that have fees that are too high."

Mr Costello said he would investigate the effect entry and exit fees had on competition between banks. "Banks have given me some information as to what they are currently doing and I will assess it and if required we will take it further," he said. Mr Costello was in Sydney on a national tour to sell last week's federal budget, which redefined the financial services industry by ending tax on income from superannuation.

Many who work in the financial services industry make their living by navigating complex taxes. Under the new budget, such advice could become less necessary.

ANZ announced a record profit for the six months to March 31 of $1.8 billion.

Russell Zimmerman, head of retailer advocacy group the Australian Merchant Payments Forum, yesterday said that banks were hypocritical in that they imposed fees on business customers that made similar mistakes to the one made by ANZ.

ANZ yesterday said that it would pay no fees to other banks despite its double-charging on 400,000 transactions.

Mr Zimmerman said he paid $27.50 to his bank every time a mistaken credit charge was made from his small business. "When they happen to us, we have to pay."

© 2006 The Age

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