ANZ and ASB face multimillion-dollar class action lawsuit over lending failures

Wednesday, 29 September 2021

Anthony Simons is one of the lead plaintiffs in a class action lawsuit against ASB and ANZ bank.

ANZ and ASB are facing a class action lawsuit from people with mortgages and personal loans who claim they were wrongly charged millions in interest and fees.

The two banks were served on Wednesday with notice of the legal action, said Auckland lawyer Scott Russell of Russell Legal.

The move followed both banks admitting in settlements with the Commerce Commission Te Komihana Tauhokohoko that they had failed to take the necessary care required of a responsible lender, said Russell, who was taking the case with funding from litigation lenders CASL and LPF Group.

Aucklander Anthony Simons, one of the representative plaintiffs in the case, said he had agreed to put his name to the case after realising ANZ and ASB could be required to pay back interest and fees as a result of their lending law breaches.

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“Banks are the first to enforce the rules when they are owed money, yet they ask for leniency when they break the law. If we do not challenge this kind of behaviour, we are condoning it and allowing it to continue,” Simons said.

ANZ and ASB said they would be defending the claim.

ASB admitted in May that it had failed to exercise the care of a responsible lender by breaching the lender responsibility principles under the Credit Contracts and Consumer Finance Act. The bank said it would make payments of $8.1 million to about 73,000 people who had home and personal loans with it between June 2015 and July 2019.

Borrowers received payments of between $68 or $135.

In March the previous year, the country's biggest bank, ANZ admitted it had let down more than 100,000 customers by failing to take the necessary care required of a responsible lender.

ASB customer Anthony Simons says he agreed to be a representative plaintiff in a case against ASB and ANZ banks to take a stand for the rule of law.

In a settlement with the commission, it agreed to pay customers a further $29.4m after admitting a breach of its responsible lending obligations between June 2015 and May 2016, having previously paid affected customers about $6m.

Simons, who has a home loan with ASB, had received a payment of $135.

Simons said he felt it was immoral for banks to keep money they were not entitled to.

But “I’m not doing it for the money. I’m taking a stand.”

Russell said neither of the two settlements with the commission prevented the class action from going ahead.

He said customers had only received a fraction of what they were entitled to.

“The communications the banks sent to customers advising them of remediation payments were extremely vague and actively dissuaded customers from querying the payments or taking further action, using words like ‘there’s nothing further you need to do’,” Russell said.

“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.

The banks must refund customers, he said.

The case would be run on an opt-out basis, which meant all those who had affected loans would be included as plaintiffs, unless they asked to be left out of the lawsuit.

ANZ is one of two banks named in a class action lawsuit seeking an as yet unknown amount of compensation.

Russell said he did not yet have a full list of people affectedbut anyone who received a payment from the banks for the breaches would be among those faced with the choice of opting out or staying in.

An ANZ spokesman said: “This issue resulted in some customers underpaying their loans by an average of $2 a month for a short time”.

“ANZ identified the issue and reported it to the Commerce Commission in 2017. ANZ carried out its own remediation and then a second remediation following a Commerce Commission investigation and settlement,” he said.

ASB settled with the Commerce Commission, admitting it breached lending laws on loans to about 73,000 customers.

The bank had paid more than $35m to customers, which it considered to be fair.

“We will be defending the claim,” he said.

An ASB spokeswoman said the bank would be making no comment as the case was before the court.

LPF Group director Phil Newland said the recent Supreme Court decision that approved opt-out class actions “expressly had consumer related claims in mind”.

Simons became involved after meeting Russell at a business networking meeting.

He was surprised to learn there was a case for the banks to pay back the interest and fees they had charged.

There had been no hint of that from ASB when he received the $135 payment, he said.

“I have lost a lot of trust. I trusted the bank would do good by me and have their systems under control,” Simons said.

He was nervous about taking the case against ASB as a customer.

“I have never been involved in anything like this before,” the graphic designer and brand development specialist said.

Russell has launched a website to communicate with potential plaintiffs.