ASB and ANZ face multi-million-dollar class action lawsuit

Case revolves around alleged breach of CCCFA

ASB and ANZ face multi-million-dollar class action lawsuit

ASB and ANZ, two of the largest banks in New Zealand, are facing a multi-million-dollar class action lawsuit over alleged failure to fully refund around 150,000 customers for fees and interest earned on loans due to disclosure breaches.

Commerce Commission lawyer Scott Russell and barristers Davey Salmon, QC, and Ali van Ammers have taken the case – jointly funded by Australian litigation funder CASL and New Zealand litigation funder LPF Group.

According to the NZ Herald, the lawsuit revolves around two Commerce Commission settlements with ASB and ANZ. Both acknowledged that they failed to provide accurate information to personal and home loan customers who varied the terms of their loans during a certain period.

In March 2020, ANZ agreed to pay $29.4 million to around 100,000 customers after confirming that it misstated the amount of interest on loans from May 30, 2015, to May 29, 2016, due to a coding error within a loan calculator used by its frontline bank staff.

Meanwhile, in May 2021, ASB agreed to pay a settlement of $8.1 million to 73,000 customers after failing to confirm it had sent written disclosure information to those who made loan variations between June 06, 2015, and June 18, 2019.

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The lawyers claim that the big banks’ remediation is only a fraction of what their customers are entitled to under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

“If a bank fails to comply with its disclosure obligations, it is not legally entitled to charge interest or fees on the affected loan until the failure is remedied,” Russell said, as reported by NZ Herald.

“To the extent a bank receives interest or fees it is not entitled to, it must refund or credit those amounts to the customer as soon as practicable.”

Russell also alleged that the banks involved in the case continued to charge interest and fees despite not being entitled to do so.

CASL managing director Stuart Price added: “We hope this class action will encourage better service and respect for all bank customers, deter future breaches, and improve regulatory compliance.”

Meanwhile, an ASB spokesperson said in a statement that the bank is aware of the class action lawsuit, adding via NZ Herald: “as this matter is now before the court, we won’t be making any further comment.”

If the case is successful, the customers will receive the amount paid by the bank, less any project costs such as legal fees, and the services fee payable to the funders varying between 16% and 23.5%.