About the Banking Class Action

The Banking Class Action alleges that ANZ and ASB are required to refund interest & fees to over 150,000 customers because they breached New Zealand consumer protection laws.  The Class Action seeks to hold ANZ & ASB accountable for failing to repay this money to customers which the Banks were not legally entitled to receive under the CCCFA. 

In Brief

Under s 22 of the CCCFA, whenever ANZ or ASB made an agreed change to a customer's loan that was a “consumer credit contract” (as defined in the Act) (Loan), the Bank was required to ensure that it provided the customer with disclosure of the full particulars of the change within prescribed time frames (Variation Disclosure).  

 

Providing accurate and timely Variation Disclosure is critical to ensuring customers understand the changes they have agreed to and are able to make informed choices, keep track of their debts and meet their repayment obligations. 

The plaintiffs allege that both ANZ and ASB breached their s22 disclosure obligations by failing to provide certain customers with timely and accurate Variation Disclosure when they made agreed changes to their loans. 

Section 99(1) of the CCCFA states that the Banks cannot enforce a Loan during any period in which they are in breach of section 22. 

 

Section 99(1A) of the CCCFA states that customers are not liable for interest and fees (costs of borrowing) on a Loan in relation to any period during which their Bank is in breach of s 22. 

The plaintiffs in the Class Action say that the effects of both sections 99(1) and 99(1A) is that customers who did not receive compliant Variation Disclosure when agreed changes were made to their Loans are not liable to pay the costs of borrowing on their Loans relating to any periods during which their Bank was in breach its section 22 obligations.

 

The plaintiffs in the Class Action say that under section 48, the Banks are required to refund or credit to their customers any costs of borrowing that the customers paid, but were not liable for by virtue of s.99 because of the Banks' breaches of s22.

The Banking Class Action seeks orders from the High Court directing ANZ and ASB to comply with section 48 and refund or credit to affected customers the costs of borrowing they were and are not legally entitled to receive or keep. Statutory damages are sought in the alternative.

Ensuring that creditors like ANZ and ASB comply with consumer protection laws like the CCCFA is fundamental to addressing the power imbalance that exists between a bank and its customers.  When borrowing money, it is critical that customers are able to trust that the information they receive from their bank is accurate, and that if a mistake is made, it will be addressed in a timely and transparent way. ​

 

In brief:

  • It is alleged that ANZ provided affected customers with Variation Disclosure containing incorrect information regarding one or more of the following (Incorrect Information):

•             the total amount payable under their loans;

•             the total amount of interest payable under their loans;

•             the amount of the new regular payments;

•             the total number of payments to be made;

•             the dates of final payment

  • It is alleged that ASB failed to provide affected customers with compliant Variation Disclosure regarding the changes to their loans.

In relation to ANZ:

  • Between 30 May 2015 and 28 May 2016 (ANZ Relevant Period), when the Bank made agreed changes to customers’ Loans, it sent them “Loan Variation Letters” intended to contain Variation Disclosure. 

 

  • During the ANZ relevant period, due to a coding error, one of the computer systems that ANZ used to calculate the figures in Loan Variation Letters, Frontline Tools, failed to take into account interest that had been accrued on the Loans, but not yet been charged (Loan Calculator Problem).  

 

  • As a result of the Loan Calculator Problem, Loan Variation Letters generated by Frontline Tools during the ANZ Relevant Period contained Incorrect Information. 

 

  • The plaintiffs in the Banking Class Action say that ANZ breached s 22 of the CCCFA by failing to provide ANZ customers who received Loan Variation Letters containing Incorrect Information with accurate Variation Disclosure in relation to agreed changes made to their Loans .  They further say that ANZ has never provided compliant Variation Disclosure in relation to those changes and therefore remains in breach of s 22.

In relation to ASB:

  • Between 6 June 2015 and 18 June 2019 (ASB Relevant Period), ASB did not have sufficient processes and procedures in place to ensure that customers received Variation Disclosure when they requested changes to repayment amounts, dates or frequency over the phone or in branch. 

  • The plaintiffs in the Class Action say that ASB also did not consistently provide customers with complaint Variation Disclosure when they requested other kinds of changes (e.g. fixing interest rates) other than by phone or in person (e.g. by email).  

 

  • The plaintiffs in the Banking Class Action say that ASB breached s 22 by failing to provide affected ASB customers with Variation Disclosure in relation to their Loans during the ASB Relevant Period.   Again, they further say that as ASB has never provided Variation Disclosure in relation to the relevant changes and remains in breach of s 22.

Both Banks deny the allegations against them, dispute the plaintiffs' interpretation of the relevant provisions of the CCCFA and have raised affirmative defences. 

ANZ Bank

The plaintiffs in the Banking Class Action bringing the claim against ANZ (ANZ representative plaintiffs) allege that ANZ breached section 22 of the CCCFA by failing to provide them and other ANZ customers who meet the eligibility criteria (ANZ class members) with Variation Disclosure when it made agreed changes made to their ANZ Loans during the ANZ Relevant Period.

  • During the ANZ Relevant Period, when ANZ made agreed changes to the ANZ class members’ Loans, it sent them Loan Variation Letters, intended to contain Variation Disclosure in respect of the changes.

  • The figures in the Loan Variation Letters were generated by a loan calculator

  • Due to a coding error, the loan calculator failed to take into account any interest that had been accrued on the class members' Loans but had not yet been charged (Loan Calculator Problem).

  • As a result of the Loan Calculator Problem the Loan Variation Letters sent to the ANZ Class Members during the Relevant Period contained incorrect information in respect of one or more of the following:

    • the total amount payable under the Loan (sometimes noted to be “indicative”);

    • the total amount of interest payable under the Loan (sometimes noted to be “indicative”);

    • the amount of the new regular payment;

    • the total number of payments to be made;

    • the date of final payment.

(Incorrect Information)

  • In 2018 and 2019, ANZ wrote to certain ANZ class members informing them of the Loan Calculator Problem and credited their loans or otherwise paid them various amounts.

  • In March 2020, ANZ entered into a settlement agreement with the Commerce Commission relating to the Loan Calculator Problem pursuant to which it agreed to make further payments to ANZ class  members (click here to read the settlement agreement).

  • In May 2020, ANZ wrote to certain ANZ class members informing them that following discussions with the Commission it had agreed to make further payments in relation to the Loan Calculator Problem and paid them various amounts.

The ANZ representative plaintiffs claim that:

  • ANZ breached s 22 by failing to provide them and the ANZ class members with Variation Disclosure when it made agreed changes to their ANZ Loans during the ANZ Relevant Period.  They say that the Loan Variation Letters did not comply with s 22, and therefore did not constitute Variation Disclosure, because they contained Incorrect Information. 

  • Pursuant to s 99 of the CCCFA, they and the ANZ class members were and are not liable for any costs of borrowing (including credit fees, default fees and interest charges) in relation to any periods during which ANZ failed and/or is failing to comply with s 22 (Breach Period);

  • To the extent that they and the ANZ class members paid ANZ costs of borrowing in relation to any Breach Periods (Breach Period Payments), ANZ was and is not entitled to receive those amounts. 

  • Pursuant to s 48 of the CCCFA, ANZ was and is required to refund or credit the Breach Period Payments to them and ANZ class members as soon as practicable.

  • Although ANZ has paid some money to the ANZ representative plaintiffs and the ANZ class members in relation to the Loan Calculator Problem, it has not fully refunded or credited the Breach Period Payments. 

  • As a result, the ANZ representative plaintiffs and the ANZ class members have suffered loss or damage in the amount of the Breach Periods Payments paid by them less any portion of those payments already refunded or credited.

The ANZ representative plaintiffs are seeking orders from the Court pursuant to ss 93(a) and 94(1)(a) of the CCCFA directing ANZ to refund or credit all Breach Period Payments to them and the ANZ class members. In the alternative, they seek statutory damages in relation to the alleged breaches of s 22.   They also seek certain declarations.   The plaintiffs’ amended statement of claim can be accessed here.

ANZ denies the allegations against it, disputes the ANZ representative plaintiffs’ interpretation of the relevant provisions of the CCCFA and has raised a number of affirmative defences.  ANZ’s statement of defence can be accessed here.

 

ASB Bank

The plaintiffs in the Banking Class Action bringing the claim against ASB (ASB representative plaintiffs) allege that ASB breached section 22 of the Credit Contracts and Consumer Finance Act 2003 (CCCFA) by failing to provide them and other ASB customers who meet the eligibility criteria (ASB class members) with Variation Disclosure when it made agreed changes to their ASB Loans during the ASB Relevant Period.

  • During the ASB Relevant Period, ASB did not have sufficient processes and procedures in place to ensure that when customers requested changes to repayment amounts, dates or frequency by phone or in person they were provided with Variation Disclosure.  ​

  • In February 2021, ASB entered into a settlement agreement with the Commerce Commission relating to its failures to provide Variation Disclosure to customers who requested changes to their repayment amounts, dates or frequency by phone or in branch during the ASB Relevant Period. Pursuant to the settlement agreement, ASB agreed to make certain payments to customers who may have been affected by the specific failures identified. ​ASB then wrote to those customers informing them that it could not confirm that it provided them with Variation Disclosure in relation to agreed changes made to their ASB Loans and paid them either $68 or $135 (depending on whether they had any ASB Loans entered into after 6 June 2015).

  • The ASB representatives allege that ASB also failed to provide customers (including the ASB representative plaintiffs) with Variation Disclosure when they requested other kinds of changes (e.g. fixing interest rates) to their Loans other than by phone or in branch (e.g. by email).   

The ASB representative plaintiffs claim that:

  • ASB breached s 22 by failing to provide them and the ASB class members with Variation Disclosure when it made agreed changes to their ASB Loans during the ASB Relevant Period.   To the extent that ASB did provide some information to the ASB representative plaintiffs and class members regarding agreed changes (e.g. by email or letter), the ASB plaintiffs say that information did not comply with s 22 and therefore did not constitute Variation Disclosure.  

  • Pursuant to s 99 of the CCCFA, they and the ASB class members were and are not liable for any costs of borrowing (including credit fees, default fees and interest charges) in relation to any periods during which ASB failed and is failing to comply with s 22 (Breach Period).

  • To the extent that they and the ASB class members paid ASB costs of borrowing in relation to any Breach Periods (Breach Period Payments), ASB was and is not entitled to receive those amounts. 

  • Pursuant to s 48 of the CCCFA, ASB was and is required to refund or credit the Breach Period Payments to them and ASB class members as soon as practicable.

  • Although ASB has paid some money to the ASB representative plaintiffs and some of the class members, it has not fully refunded or credited the Breach Period Payments. 

  • As a result, the ASB representative plaintiffs and the ASB class members have suffered loss or damage in the amount of the Breach Periods Payments paid by them less any portion of those payments already refunded or credited.

The ASB representative plaintiffs are seeking orders from the Court pursuant to ss 93(a) and 94(1)(a) of the CCCFA directing ASB to refund or credit all Breach Period Payments to them and the ASB class members. In the alternative, they seek statutory damages in relation to the alleged breaches of s 22.   They also seek certain declarations.  The plaintiffs’ amended statement of claim can be accessed here.

ASB denies the allegations against it, disputes the ASB representative plaintiffs’ interpretation of the relevant provisions of the CCCFA and has raised a number of affirmative defences.  ASB’s statement of defence can be accessed here.