Responsible consumer lending - Corporate Responsibility

Responsible consumer lending

While most households repay their debts comfortably, consumer debt is rising and high living costs in Australia are placing pressure on many households.

In this environment, having robust lending guidelines which ensure we lend only to those who have the capacity to repay their debt - should be a minimum standard for any lender

ANZ has gone further, taken voluntary steps over the last three years to ensure our most vulnerable customers are protected from inappropriate offers of credit and that those who find themselves in financial difficulty receive the right support.

Helping you get back on track
If you are experiencing difficulty making the payments due on your ANZ loan or credit card our team of specialists may be able to assist you. Our team will take the time to understand your situation and discuss available options with you taking into account your circumstances. Contact us on 1800 25 28 45. Our lines are open 8am - 8pm Monday to Thursday (AEST) and 8am - 7pm Friday (AEST).

Helping you get back on track

If you are experiencing difficulty making the payments due on your ANZ loan or credit card our team of specialists may be able to assist you. Our team will take the time to understand your situation and discuss available options with you taking into account your circumstances.

Our Customer Charter Commitments
ANZ was the first bank in Australia to introduce public responsible lending commitments. Under these commitments, which are part of our Customer Charter, ANZ does not offer a credit card limit increase offer to customers who have a recent poor credit performance or are struggling to meet repayments on their ANZ credit card (even if they have not defaulted on their account). We also do not offer a credit card limit increase to a customer we know is on a fixed income (e.g. receiving a government pension). Any credit limit increase offer we make: outlines how much the minimum monthly payment would increase if the offer was accepted recommends the customer reject the offer if their personal circumstances have changed includes information about how to request a lower offer These promises respond to research we conducted into financial difficulty, which found that some customers can accept these offers without fully considering whether they can afford the extra credit. ANZ's performance on these promises is independently audited every 12 months, along with the other promises contained in the Customer Charter.

Our Customer Charter Commitments

ANZ was the first bank in Australia to introduce public responsible lending commitments.

Under these commitments, which are part of our Customer Charter, ANZ does not offer a credit card limit increase offer to customers who have a recent poor credit performance or are struggling to meet repayments on their ANZ credit card (even if they have not defaulted on their account).

We also do not offer a credit card limit increase to a customer we know is on a fixed income (e.g. receiving a government pension).

Any credit limit increase offer we make:

outlines how much the minimum monthly payment would increase if the offer was accepted
recommends the customer reject the offer if their personal circumstances have changed
includes information about how to request a lower offer

These promises respond to research we conducted into financial difficulty, which found that some customers can accept these offers without fully considering whether they can afford the extra credit.

ANZ's performance on these promises is independently audited every 12 months, along with the other promises contained in the Customer Charter.

Customer Connect: Supporting Customers in Difficulty
There will always be some customers who find themselves in financial difficulty, due to changed circumstances and other factors. ANZ's Customer Connect program is designed to make it as easy as possible for customers struggling with their credit to get the help they need: Spotting customers who need help: Our staff have been trained to proactively identify customers who may benefit from more time and flexibility to manage their finances during a period of financial instability or difficulty. We no longer wait for the customer to ask for help. No need to prove hardship: We don't require a customer to demonstrate why they are in hardship (e.g. through job loss or illness) before they can access assistance. This requirement was a barrier for many customers. Tailoring plans and cutting red tape: Where possible, staff will tailor temporary repayment arrangements based on what our customers can afford to pay at the time. Payment plans will be finalised over the phone wherever possible. Read more about how Customer Connect was developed

Customer Connect: Supporting Customers in Difficulty

There will always be some customers who find themselves in financial difficulty, due to changed circumstances and other factors.

ANZ's Customer Connect program is designed to make it as easy as possible for customers struggling with their credit to get the help they need:

Spotting customers who need help: Our staff have been trained to proactively identify customers who may benefit from more time and flexibility to manage their finances during a period of financial instability or difficulty. We no longer wait for the customer to ask for help.

No need to prove hardship: We don't require a customer to demonstrate why they are in hardship (e.g. through job loss or illness) before they can access assistance. This requirement was a barrier for many customers.

Tailoring plans and cutting red tape: Where possible, staff will tailor temporary repayment arrangements based on what our customers can afford to pay at the time. Payment plans will be finalised over the phone wherever possible.

Read more about how Customer Connect was developed

Helping Customers Plan Repayments

The ANZ Credit Card Payoff Calculator offers our customers information to help them plan their credit card payments. It allows customers to calculate:

the monthly payment they would need to make on their credit card account to pay off their balance within a nominated time frame; or
the time it would take to pay off their balance with a nominated monthly payment.

Case study: Responsible credit and remote communities
Consumers in remote communities are often disadvantaged by a lack of access to basic banking services, combined with limited understanding of financial products and agreements. Indigenous people are potentially vulnerable, with some falling victim to predatory lending practices in recent years. An example of the challenges faced by consumers and finance companies is the sale of overpriced, unroadworthy and inappropriate vehicles in outback Australia. ANZ's Esanda subsidiary responded to this issue by establishing a Remote Area Credit Assessment Policy. The Policy stipulates that credit will only be provided for vehicles which are suitable for the conditions it will be driven in. Reduced loan terms have also been adopted to ensure loans do not outlast the useful life of the vehicle.

Case study: Responsible credit and remote communities

Consumers in remote communities are often disadvantaged by a lack of access to basic banking services, combined with limited understanding of financial products and agreements. Indigenous people are potentially vulnerable, with some falling victim to predatory lending practices in recent years.

An example of the challenges faced by consumers and finance companies is the sale of overpriced, unroadworthy and inappropriate vehicles in outback Australia.

ANZ's Esanda subsidiary responded to this issue by establishing a Remote Area Credit Assessment Policy. The Policy stipulates that credit will only be provided for vehicles which are suitable for the conditions it will be driven in. Reduced loan terms have also been adopted to ensure loans do not outlast the useful life of the vehicle.

Progress in 2008

We implemented Customer Connect, our new consumer hardship program, throughout our retail banking operations in 2008 and have developed a credit card repayment calculator to provide tips to help our customers stay in control of their credit card.

We experienced two breaches of our responsible lending commitments this year. First, a system change made in February resulted in 1,316 customers being offered Credit Limit Increases that breached our promise. Second, as part of the July Platinum credit card upgrade campaign, the process to remove certain categories of customers from receiving the Credit Limit Increase offer (with the Platinum upgrade offer) was not performed. A total of 737 customers were affected from this breach.

As part of our commitment to exercise leadership in issues affecting our customers, ANZ made a submission to the Australian Treasury Green Paper on Financial Services and Credit Reform.

Our submission supports the national regulation of all forms of consumer credit to avoid inconsistency in credit regulation between States and Territories, and to create a single regime that can adapt to changes in the market place more rapidly.

The Council of Australian Governments has agreed to this measure and transition of credit regulation to the Commonwealth will continue in 2009.

The future

We have committed to reviewing our approach to responsible lending in 2009, including how we market and offer credit, to ensure consistency with the principles of responsible money management and use of credit. Progress on this goal will be reported in our interim and full year Corporate Responsibility Reports.