The regulator sets out its legal case against ANZ over the bank's fees policy.

Australia’s financial regulator has confirmed it has started legal action against Australia and New Zealand Banking Group, claiming that the lender was not entitled to charge clients certain types of fees that totalled more than A$50 million ($34.4 million).

The action against ANZ by the Australian Securities and Investments Commission is yet another twist in a saga that has seen a number of banks and wealth managers in the country be punished or admonished for shortcomings, such as money laundering control lapses, mis-selling and charging for services that were not delivered. (See a round-up here.)

ASIC said that the bank’s contract terms and conditions defined a periodical payment as a debit from an ANZ account which the customer instructed ANZ to make to the account of another person or business. This definition excluded payments between two accounts in the name of the same person or business. However, between August 2003 and 23 February 2016 ASIC claimed that ANZ wrongly charged transaction fees and non-payment fees for periodical payments between accounts in the same name.

“Transaction fees were charged when a periodical payment was successful, and non-payment fees were charged when a periodical payment could not be made due to insufficient funds in the customer’s account,” ASIC said.

During the 2003-2016 period the transaction fee for periodical payments varied between A$1.70 and A$4 for business accounts and was either $4 or free for retail accounts. And the non-payment fee for periodical payments varied between A$35 and A$45 for business accounts and was between A$6 and A$45 for retail accounts.

ASIC alleged that between 26 July 2013 and 23 February 2016, ANZ unlawfully charged the fees on at least 1,340,087 occasions.

The watchdog estimated that the total gross loss to customers during the period 1 January 2008 to 23 February 2016 was more than A$50 million. ANZ has paid approximately A$28 million in remediation to customers to date. However, ANZ has not paid remediation to customers who have been charged the fees prior to 31 December 2007, ASIC added.