In a significant legal setback, ANZ has lost a class action lawsuit in New Zealand, resulting in a potential payout of $125 million due to breaches of the Credit Contracts and Consumer Finance Act (CCCFA). The case involved approximately 17,000 customers who were undercharged on their mortgages between 2015 and 2016.
The High Court awarded summary judgment against ANZ, which found that the bank breached its disclosure obligations. This ruling came after it was revealed that errors in loan variation letters led to customers being undercharged by about $2 each month.
The immediate financial implications are stark. The court directed ANZ to refund the representative plaintiffs a total of $32,728.42. Additionally, ANZ self-reported the issue and had already paid more than $35 million to affected customers prior to this ruling.
Scott Russell, representing the plaintiffs, emphasized the importance of this judgment: “This judgment is an important step in holding ANZ accountable under consumer protection legislation designed to ensure borrowers receive accurate information about their loans.” He noted that the court found that the plaintiffs were not liable for costs incurred during the period ANZ was in breach.
The class action was initiated in 2021 and included ASB as a co-defendant, which settled for $135.6 million. This highlights broader issues within the banking sector regarding compliance with consumer protection laws.
Antonia Watson, from ANZ, acknowledged the situation: “We maintain that the potential consequences under the current law are disproportionate and not aligned with any actual harm caused.” She reiterated that ANZ had taken accountability by self-reporting and compensating affected customers.
The Finance and Expenditure Select Committee has recommended changes to the CCCFA concerning lenders’ disclosure obligations. ANZ is currently weighing its options for an appeal against the court’s decision.
This ruling underscores ongoing challenges in ensuring transparency within financial institutions. As more consumers become aware of their rights under consumer protection laws, banks may face increasing scrutiny over their practices.
