ANZ creating 'obstacle' for ING investors

Liz Brown says it is 'one of the fundamental principles of an ombudsman scheme that it should be easy to make a complaint'. Photo / Mark Mitchell

The Banking Ombudsman has accused the the ANZ bank of putting an "unnecessary obstacle" in the way of investors in ING's frozen funds who want to make a complaint and still sign up to its settlement offer.

ING, which is 49 per cent owned by the ANZ, revealed its "final" offer to the 8000 unit holders locked into its Regular Income Fund (RIF) and Diversified Yield Fund (DYF) last week.

Investors can choose to either sell their units and take cash up front of 60c a DIF unit or 62c an RIF unit or invest the cash in an on-call savings account for a guaranteed annual interest rate of 8.3 per cent for the next five years. But those who agree must waive their rights to make a claim or take legal action involving the funds.

Last week ANZ, which sold the funds to 2700 investors, said it would allow investors to continue to make complaints to itself and the banking ombudsman until July 31, even if they agreed to the offer.

But documents sent out to investors yesterday also included an additional clause which means those who have already complained or still want to will also have to fill out a statutory declaration form and have it witnessed by a lawyer or justice of the peace before sending it back to the ANZ.

Banking ombudsman Liz Brown said she was disappointed by the condition.

"ANZ's requirement for a statutory declaration puts an unnecessary obstacle in the way of potential claimants," she said. "It is one of the fundamental principles of an ombudsman scheme that it should be easy to make a complaint."

Brown said the condition would not be allowed for any other complaint but because investors were agreeing to sign a settlement, ANZ could put any conditions into the agreement it wanted to.

John Body, ANZ managing director of private banking and wealth, said the bank believed the statutory declaration condition was reasonable given the seriousness of the potential claims and the substantial level of funding that ANZ had committed to the ING offer.

"By asking customers for a statutory declaration, we are asking them to formally attest to the accuracy of any claim they make. Given the serious nature of the claim, and the substantial level of funding that ANZ has already committed to the ING offer, we consider this reasonable."

ING and the ANZ are jointly committing about $400 million to the settlement.

The ANZ estimates 10 per cent to 15 per cent of its 2700 investors have already complained to the ANZ about the funds. The banking ombudsman has been asked to investigate about 300 cases and has completed about 100 of those. In many cases ANZ had either agreed to or had been required to pay compensation.

The ING funds invested in packaged debt securities and were frozen in March last year. Since then ING has been working on an offer to investors, who have seen the value of the funds shrink from more than $500 million to just $143 million.