ANZ Bank Sued Over Loan Standards on Isolated Tropical Island
ANZ Bank Sued Over Loan Standards on Isolated Tropical Island
(Bloomberg) -- For Australian banks the jabs just keep coming -- and not always from the most expected sources.
Australia & New Zealand Banking Group Ltd. is facing a civil suit in Guam over lending standards at its American Samoa offshoot.
Two retired U.S. military veterans claim the Melbourne-based bank is liable for “systematic violations of the Truth in Lending Act,” according to documents filed in the Guam district court March 21. They claim the bank breached mortgage contracts in charging excessive late fees, didn’t provide adequate notice of changes in interest rates and didn’t provide adequate bank statements.
Ironically for the bank, a trigger for the lawsuit was a letter it sent to one of the plaintiffs in 2015 acknowledging it had overcharged $6,375.18 in interest. After resolving to monitor their balance more closely, the plaintiffs say they became “frustrated by the lack of clear and conspicuous information” - citing one letter they received that gave a projected balance of $51,952.55 on one page -- and $41,564.40 on another.
A spokesman for ANZ didn’t immediately reply to a request for comment.
In Australia, the bank has refunded customers A$90 million ($70 million) after identifying technical glitches that resulted in incorrect interest rates or fees being charged.
That ANZ has a retail operation in American Samoa -- population 56,000 and 3,180 miles from its Melbourne headquarters -- at all is a legacy of its ill-fated overseas expansion in the early 2000s. It bought the American Samoa operations in 2001 and its Guam business in 2007, according to the court filing.
As Australia’s big banks undergo more scrutiny at home as a Royal Commission continues its inquiry into allegations of misconduct, it’s a reminder that surprises can come from anywhere.
The case is Parker et al v ANZ Guam Inc., 1:18-cv-00010, District Court of Guam (Hagatna)
To contact the reporter on this story: Emily Cadman in Sydney at ecadman2@bloomberg.net.
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Peter Vercoe, Edward Johnson
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