ASB class action settles for $135.6 million, lawyer says

Tuesday, 7 October 2025

The class action lawsuit against ASB was launched in late 2021.

ASB has settled a class action lawsuit for $135.6 million, Scott Russell, the lawyer heading the against ASB, says.

In a statement to media, Russell said the settlement was reached without ASB admitting liability and is subject to court approval. The class action continues against ANZ.

ASB chief executive Vittoria Shortt confirmed the bank had settled the case, and said: “The settlement brings to an end four years of legal proceedings and provides certainty for us and for our customers. The agreement we’ve come to is a pragmatic way to settle this matter.”

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The news comes just months after the Government announced it would change the law to protect ASB and ANZ from the multi-million dollar compensation claim over loan disclosure mistakes they made between 2015 and 2019.

The claim was taken under laws introduced in 2015, which were designed to ensure borrowers were not misled over how much their loans would cost them, and the terms of their loan contracts.

The class action was seeking to have the High Court order banks to repay all the fees and interest they charged borrowers during the period in which they failed to meet their disclosure requirements.

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When announcing the proposed law change in April, Commerce and Consumer Affairs Minister Scott Simpson said that penalty was unfair, and his proposed law change would allow the courts to decide on an appropriate penalty based on how much harm lenders’ mistakes caused to borrowers.

Simpson’s move bought a swift protest from Russell, who said he was “absolutely shocked” at the move, which he said completely undermined the case.

Both ASB and ANZ were defending the case, and ANZ said in July it believed it had a defence against the claim.

The law under which the class action was being taken was introduced in 2015 under Prime Minister John Key, who went on to be chairperson of ANZ in New Zealand.

Parliamentary select committee hearings were held in July into the controversial law change planned by Simpson.

At hearings of the Finance and Select Committee, Roger Beaumont, chief executive of the Banking Association, said: “The idea that simple disclosure failures could result in hundreds of billions of dollars being paid in free loans, that is not merely a harsh penalty. That’s a grossly disproportionate penalty, and one that creates financial stability risks,” said legal academic James Every-Palmer KC, appearing for the association.

However, Russell told the select committee that the plaintiffs were frustrated and angry at the Government’s move, and felt like they were having the rug pulled out from under their feet.

Shortt said ASB supported Simpson’s bill, which would bring clarity to what she called a confusing piece of legislation.

As part of the settlement, ASB made no admission of liability or wrongdoing, she said.

The settlement remained subject to approval by the High Court.

The Court process may take several months, Shortt said.

ASB and the plaintiffs would seek directions from the Court on the process for communicating with class members about the settlement.