ANZ faces a potential payout of $125 million after losing a class action lawsuit over significant breaches of consumer protection laws. The High Court found that ANZ breached the Credit Contracts and Consumer Finance Act (CCCFA) by undercharging approximately 17,000 customers on their mortgages between 2015 and 2016.
Key facts:
- The court awarded summary judgment against ANZ in relation to the CCCFA class action proceedings.
- The class action was initiated in 2021 and involved customers who were undercharged by about $2 a month due to errors in loan variation letters.
- ANZ’s maximum potential liability is estimated at NZD$125 million.
- The court directed ANZ to refund the representative plaintiffs a total of $32,728.42.
- ANZ self-reported the issue and has already paid more than $35 million to affected customers.
The court’s decision underscores the importance of compliance with disclosure obligations under the CCCFA. Scott Russell, an attorney involved in the case, stated that this judgment holds ANZ accountable for ensuring borrowers receive accurate information about their loans. Yet, Antonia Watson from ANZ argued that the consequences under current law are disproportionate compared to any actual harm caused.
The class action also included ASB, which settled for $135.6 million. The Finance and Expenditure Select Committee has recommended changes to the CCCFA to improve lenders’ disclosure obligations.
ANZ is considering an appeal against the court’s decision. The outcome could set a precedent for how banks handle similar cases in the future. The next steps for ANZ remain uncertain as they weigh their options following this ruling.
