Compo denied for 40 per cent of ING investors, group says

Photo / NZ Herald

About 40 per cent of investors in ING's two frozen investment funds who applied for the ANZ bank's offer of additional compensation have been turned down, a lobby group estimates.

The Frozen Funds group, which represents the investors, has surveyed its membership to find out what ANZ is offering the 1300 to 1600 investors who have filed claims.

But ANZ disputes the figure.

In July, more than 13,000 investors with $500 million locked in the ING Diversified Yield and Regular Income Funds accepted ING's offer to buy back units in the two impaired investments for 60c and 62c respectively. The units were originally worth $1.

In return they signed a waiver agreeing not to benefit from any future action taken in relation to the funds.

Exempted were 2700 ANZ customers, who had until July 31 to make a formal complaint to the bank. ING New Zealand was at the time half-owned by ANZ and is now fully owned by the bank.

The Frozen Funds Group says around 800 customers have received a response from ANZ.

Spokesman Gerard Prinsen said that in a meeting with ANZ on Friday it had asked for details of the compensation offers but got no response.

However, it had surveyed 62 investors and found that 26, or 42 per cent, had had their claims for additional compensation rejected.

Another 24 per cent had been offered full compensation and the rest had received offers of partial compensation, in some cases as little as 1 per cent.

Prinsen said the group took issue with the bank compensating some people and not others when the scale of the situation indicated a systemic problem.

"For us the key conclusion is the bank has admitted that in more than half the cases it needs to make an offer of additional compensation.

"You don't make a few hundred mistakes. And if you do you should look at your systems, I think."

He said it was also hard for people receiving offers to assess whether they were fair, because they did not know what they were based on or how they compared with what had been offered to others.

The letters the bank had sent to people said their cases had been assessed against such criteria as the proportion of their total wealth invested in the funds, their risk profile, and how much time they were allowed to study the investment statements.

But they did not indicate how much weight was given to what, "so you wouldn't know on what grounds you were given a particular amount of compensation", Prinsen said.

ANZ says the information provided by the Frozen Funds Group is inaccurate. "We would urge people to look at the offer they have received in the context of their own circumstances," a spokesperson said.

The bank had assessed each client's situation on a case-by-case basis, and the settlements were confidential.

"As we have yet to complete the process of writing back to all affected customers, we are not in a position to talk about levels of compensation.

"We acknowledge this process has taken longer than expected but we are committed to getting as many of the settlement payments as possible made before the end of the year," the spokesperson said.

The ANZ customers still have the right to take their cases to the Banking Ombudsman.