Banks deny wrongdoing as plaintiffs offer $600m deal

Plaintiffs in the class action lawsuit against ANZ and ASB have offered to settle the four-year legal dispute for a combined total of more than $600 million.
The case relates to alleged breaches of credit laws affecting over 150,000 customers between 2015 and 2019, where the banks were accused of overcharging interest and fees due to disclosure failings.
The settlement offer was disclosed during a Finance and Expenditure Select Committee hearing on proposed changes to the Credit Contracts and Consumer Finance Act (CCCFA) – changes that plaintiffs claim could retrospectively undermine their case, RNZ and The Post reported.
“We’re making this offer to protect our clients and the country from the uncertainty National [government] will create if it pushes these amendments through,” said class action lawyer Scott Russell.
Russell warned that the CCCFA amendments, if passed, would give the banks legal leeway to argue for reduced or eliminated refunds – “effectively giving them a free pass for misconduct between 2015 and 2019.”
Banks dismiss offer as “stunt”
ANZ rejected the offer, calling it a “stunt intended to influence members of Parliament.”
“The proposed settlement appears to be primarily driven by the financial interests of the litigation funders, and the proposed resolution does not reflect the nature or scale of the underlying issue,” the bank said.
“We have rejected the settlement offer, which if we had accepted, would likely have been worth around $50 million to the litigation funders.”
The class action is jointly funded by CASL (Australia) and LPF Group (New Zealand), who would receive a share of any court award or settlement.
Proposed law change fuels controversy
The government is currently debating retrospective changes to the CCCFA, which would give courts discretion to reduce payouts if banks are found liable, depending on whether actual harm occurred.
The banking industry argues the changes are essential to avoid disproportionate penalties.
Roger Beaumont, chief executive of the New Zealand Banking Association, told the committee that minor disclosure errors – “like getting their phone number wrong” – could result in the full repayment of interest and fees under the current law.
Legal academic James Every-Palmer warned of financial system risks, saying “the idea that simple disclosure failures could result in hundreds of billions of dollars being paid in free loans... is a grossly disproportionate penalty.”
NZBA cited Reserve Bank modelling suggesting the sector could face exposure of up to $12.9 billion if the law isn’t changed.
Plaintiffs: Banks lobbied to avoid liability
Plaintiff counsel Davey Salmon strongly opposed the retrospective amendment, calling it “almost unprecedented to close down rights” in an active case.
“There is not a menace here,” Salmon said.
“The sums sought will not affect the viability, or the balance sheets, materially of either of the defendant banks.
“The only answer, the elephant in the room, is that a claim has been brought against two large banks, and they don’t like it.”
He said plaintiffs remain “in the dark” about the details of lobbying meetings between banks and government ministers, and that lobbying had clearly shaped the shift in legislative direction.
“There’s an unpalatable flavour to how this was done,” Salmon said. “These are real people, and there are a lot of them.”
Customers speak out
ASB customer Anthony Simons, a plaintiff in the case, shared his frustration with MPs.
“I went through a really difficult time, and I had to pay a $10,000-plus break fee... There was no sympathy,” Simons said.
“But now that the banks are in breach, they think, ‘No worries. We will just change it after the fact.’ That’s not fair. The fact that banks can lobby and influence government to such an extent that they will retrospectively change the law is scary to me.
“It’s not democracy, and in my eyes, it’s not fair to everyday Kiwis, so please don’t let that happen,” he said.
Background and next steps
In 2020, ANZ and ASB paid $43 million in refunds following a settlement with the Commerce Commission over similar disclosure failings. The current class action, however, seeks a much larger payout based on the same alleged conduct.
The Finance and Expenditure Select Committee continues to hear submissions. The big banks, including ANZ and ASB, are expected to speak to the committee on Monday, RNZ and The Post reported.