News
The Commerce Commission’s settlement with ANZ National Bank Ltd and ING (NZ) Ltd
Message from the Banking Ombudsman, Deborah Battell
14 September 2010
Background
Earlier in the year, the Commerce Commission reached an out of court settlement with ANZ and ING relating to the companies’ marketing and promotion of the ING Diversified Yield and Regular Income Funds.
The Commission has now determined how the settlement will be distributed amongst eligible investors. We understand just under 80% of eligible investors will receive some compensation. Eligible investors will be notified in writing this week about whether they are entitled to a payment, and if so, the amount of that payment.
The Banking Ombudsman process is separate to the Commerce Commission and the settlement it reached. The Banking Ombudsman is continuing to investigate complaints made to her by ANZ customers about advice it gave in relation to the funds. She currently has around 130 open investigations. She hopes to have all complaints assessed by the end of the year.
The Commerce Commission’s payment method
The Commerce Commission has taken a “percentage capital return target” approach. On the basis of the methodology and assumptions used, the additional payments are understood to return investors to 96% of the capital invested in the funds. However, the Commission has not guaranteed that an investor will receive exactly 96% of their capital back.
The Commission also took into account whether an investor had received compensation from ANZ through the Banking Ombudsman process, and if so, how much. The Commission’s compensation generally relates to the proportion of the investment not compensated for by the Banking Ombudsman process.
More information about the Commission’s approach can be found on its website: www.comcom.govt.nz.
Complaints considered by the Banking Ombudsman
Some investors who have received a payment of compensation from ANZ through the Banking Ombudsman process may receive a further payment of compensation through the Commerce Commission settlement, but not all investors will.
In cases where the Banking Ombudsman fully upheld the complaint, it is unlikely the investor will receive a further payment of compensation. This is because the investor will likely have received more than 100% of their capital back.
In cases where the Banking Ombudsman partly upheld the complaint, the investor may receive a further payment of compensation. This will, however, depend on the assumptions applied by the Commission. For example, the assumptions it made about tax rebates.
The Banking Ombudsman understands investors have not been disadvantaged by having received a payment of compensation through her office.
The Banking Ombudsman also understands investors whose complaints were not upheld by her will be treated by the Commission in the same way as all other investors. An investor has not been disadvantaged because the Banking Ombudsman did not uphold their complaint.
Complaints not yet considered by the Banking Ombudsman
Investors who receive payments from the Commerce Commission’s settlement may still receive a further payment of compensation through the Banking Ombudsman process if she upholds their complaint.
If compensation is awarded, the Banking Ombudsman will take into account the amount of the Commission’s settlement payment. Because the Commission has taken into account payments already received through the Banking Ombudsman process, it is only fair for her to take into account the Commission’s settlement payments when assessing the remaining complaints.
The Banking Ombudsman’s aim is to ensure all ANZ customers who are eligible for compensation through her process, have those compensation claims treated in the same manner irrespective of when their cases were assessed.
Investors who do not receive a payment from the Commission’s settlement, may still receive a payment of compensation through the Banking Ombudsman process.
Banking Ombudsman unable to consider new complaints
The Banking Ombudsman is not able to consider new complaints from ANZ customers about advice it gave in relation to the funds.