What did the Banks’ fail to do?
ANZ and ASB have already admitted they failed to provide proper disclosure information to customers which they are required to provide under the CCCFA. During the relevant periods i.e., between the time customers have not been provided with accurate disclosure information, the Banks are not legally entitled to take the costs of borrowing from customers and if they do, they must fully refund or credit this money.
This legal claim holds the Bank's accountable for failing to repay this money, which is a breach of section 48 the CCCFA.
Do I need to pay money to join?
No. You do not need to pay anything to participate in the Banking Class Action. The Banking Class Action is being jointly funded on a success fee basis by Australian based funder, CASL Management Ltd (CASL) and New Zealand’s leading litigation funder, LPF Litigation Funding No. 33 (LPF) [Litigation Funders]. They will jointly pay all costs relating to the Class Action in the first instance.
If the Action is unsuccessful, CASL and LPF will not recover its costs (and there will be no cost to you).
If the Action is successful, you will be entitled to share in the benefit of any order, judgment or settlement obtained, after deduction of the amounts to which the Litigation Funders are entitled pursuant to the contractual arrangements between it and the representative plaintiffs and others who register to participate in the Action. These amounts include “Project Costs” (being the legal and other costs incurred in pursuing and the Action) and the “Services Fee” (a percentage of the overall amount recovered).
How much will I receive if the action is successful?
The plaintiffs in the Action are asking the Court to order ANZ and ASB to fully refund or credit the cost of borrowing (interest and fees) to affected borrowers, which the Banks were not legally entitled to charge or receive during the period which they breached their disclosure obligations under section 22 of the CCCFA.
By way of example, if you had a home Loan of $500,000 and the interest rate applicable at the time was 4%, your interest payments would have been $20,000 per year. If the Action is sucessful, we will be seeking to recover $20,000 on your behalf for each year (or part thereof) your Bank was in breach of its disclosure obligations to you.
It is important to understand that you would not be entitled to receive the total amount recovered. From that sum, the litigation funder funding the Action will deduct its Services Fee (which at first instance will be between 16% and 23.5%) and a share of the costs incurred in achieving a successful outcome (such as, for example, legal fees).
How long is the legal action likely to take?
The time taken to complete the legal proceedings is difficult to predict as it will depend on a number of factors, including the availability of the courts and the approach adopted by the Banks.
It is expected that the Banking Class Action will proceed in two stages:
In the first stage, the issues of whether the Banks are liable to the representative plaintiffs, and whether certain declarations relating to the operation of the relevant provisions of the CCCFA should be made will be decided.
If the representative plaintiffs are successful in stage 1, the proceeding will progress to stage 2. In stage 2, all issues not addressed in stage 1 will be tried and determined.
What is the Banking Class Action about?
The Banking Class Action is a legal claim seeking High Court orders requiring ANZ and ASB to refund or credit all the interest and fees paid by over 150,000 customers in relation to affected loans which they were not legally entitled to take under the Credit Contracts & Consumer Finance Act 2003 (CCCFA) because they failed to provide correct disclosure information to customers.
ANZ and ASB have admitted they failed to provide proper disclosure information to customers who varied their Loans during specific times, which is a breach of section 22 of the CCCFA.
Section 99(1A) of the CCCFA states that if a Bank neglects to provide this disclosure information, customers are not liable to pay the cost of borrowing, including interest and fees. Section 48 goes on to state if a Bank has received this money which they are not entitled to receive, they must repay it.
How do I know whether I an eligible to be part of the the class action?
ANZ Bank Customers
You may be eligible to participate in the claim against ANZ if:
You had a Loan with ANZ during the ANZ Relevant Period (30 May 2015 - 28 May 2016); and
Any changes were made to your ANZ Loan during the ANZ Relevant Period (for example, re-fixing your interest rate or changing the amounts or frequency of your repayments).
If you made changes to your Loan during the Relevant Period you will have received a Loan Variation Letter from ANZ, which mostly likely contained incorrect information regarding the effects of the changes.
We understand many ANZ customers will not have kept the records of changes to their Loans dating back to 2015 and 2016. If you think you may meet the above criteria, but are unsure, please register and we will check your eligibility.
ANZ has itself identified you as meeting the above criteria if you received a letter from the Bank in or around May 2020 informing you that, following discussions with the Commerce Commission, ANZ agreed to make a payment to you in relation to a “loan calculator problem” (which caused the Loan Variation Letters to contain the incorrect information – see “About”). If you have received this letter, we encourage you to register as you will almost certainly be eligible to participate in the claim against ANZ.
Lastly, you will not qualify to participate in the claim against ANZ if your Loan is in the name of an entity (such as a company) or in your name in your capacity as a trustee of a family trust.
ASB Bank Customers:
You may be eligible to participate in the claim against ASB if:
You had a Loan with ASB during the ASB Relevant Period (6 June 2015 – 18 June 2019);
You made changes to your ASB Loan repayment dates, amounts or frequency during the ASB Relevant Period (Relevant Variations).
During the ASB Relevant Period, ASB did not have adequate processes and procedures in place to ensure that it sent its customers the required disclosure information when they made Relevant Variations to their Loans. You will be eligible to participate in the claim against ASB if you were one of the customers who did not receive the required disclosure.
We understand that many ASB customers will not have kept records of Relevant Variations to their Loans as far back as 2015 to 2019. If you think you may meet the above criteria, but are unsure, please register and we will check your eligibility.
ASB has itself identified you as meeting the above criteria if you received an email from them earlier this year informing you that the Bank may not have given you written confirmation of changes to your loan as required under the CCCFA and that, in recognition of the same, it had decided to pay you either $68 or $135. If you have received one of these emails, we encourage you to register as you will almost certainly be eligible to participate in the claim against ASB.
Lastly, you will not qualify to participate in the claim against ANZ if your Loan is in the name of an entity (such as a company) or in your name in your capacity as a trustee of a family trust.
I have requested changes the terms of my loan a few times. How do I know if I am eligible to participate?
ANZ Bank customers:
If you made changes to your Loan with ANZ between 30 May 2015 and 28 May 2016 you may meet the criteria to participate in the claim against ANZ and we encourage you to register so that we can check your eligibility.
ASB Bank customers:
If you made a change to your ASB Loan repayment dates, amounts or frequency between 6 June 2015 and 18 June 2019 you may meet the criteria to participate in the claim against ASB and we encourage you to register so that we can check our eligibility.
What information will I need to provide to register?
You will need to provide your personal contact details and basic information relating to your ANZ or ASB Loan. You will also need to sign the Participation & Funding Agreement which you will receive once you have registered your interest in joining the Banking Class Action.
Who is funding the Banking Class Action?
The Banking Class Action is being jointly funded by leading Australian based funder, CASL and New Zealand’s pre-eminent litigation funder, LPF Group. Together they are funding the litigation on a success fee basis, at no upfront cost to the plaintiffs and will be entitled to repayment of the costs incurred in pursuing the Action and to a success fee, out of any proceeds from the case should the action be sucessful.
What is a class action?
A class action is legal action brought by one or more named plaintiffs on behalf of a group of people who have the same or similar legal rights.
Class actions promote access to justice by allowing groups of people with similar rights, issues and interests to band together and bring a single claim, pooling resources. This is especially important for claims like this one where it would likely be uneconomic for a single affected customer to bring a claim against their Bank because the amount in issue is too small relative to legal costs.
What consumer laws have the banks breached?
The Banking Class Action alleges the Banks breached section 22 and section 48 of the Credit Contracts and Consumer Finance Act (CCCFA) and also relies on section 99(1A). These provisions are described below.
Under section 22 of the CCCFA, whenever a creditor makes an agreed change to a customer’s loan (defined as a “consumer credit contract” in the CCFA (Loan), it is required to provide the customer with timely disclosure of the full particulars of the change (Variation Disclosure).
It is alleged that both ANZ and ASB failed to provide customers who made changes to their Loans during the ANZ and ASB Relevant Periods with Variation Disclosure in relation to those changes.
ANZ sent customers Loan Variation Letters which were intended to provide Variation Disclosure, but contained inaccurate information. ASB failed to have processes and procedures in place to ensure that all of its customers received Variation Disclosure.
The plaintiffs in the Action say that, to date, neither ASB nor ANZ has provided affected customers with Variation Disclosure in relation to changes made their Loans during the Relevant Periods. Accordingly, the Banks are still in breach of s 22.
Section 99 (1A)
Section 99(1A) states that a borrower is not liable for the costs of borrowing (interest and fees) in relation to any period during which a creditor is in breach of its disclosure obligations under section 22.
Most ANZ and ASB customers affected by the Banks’ alleged breaches of section 22 will have paid (and may still be paying) all of the costs of borrowing on their Loans.
The effect of section s99(1A) is that such customers were and are not liable to pay the costs of borrowing on their Loans relating to the periods during which the Banks were and are in breach their section 22 obligations. The relevant period will differ for each affected customer. Generally, it will begin on the day that the customer first made a change to their Loan during the Relevant Period and end either: (i) when their Loan was repaid; or (ii) the date on which the customer’s claim against their Bank is resolved (whether through judgment or settlement).
Section 48 of the CCCFA states that if a creditor receives payments from a borrower that it is not entitled to receive, it must refund or credit the payments to the borrower as soon as practicable.
The plaintiffs in the Action say that the effect of section 99(1A) is that the Banks were not entitled to receive any costs of borrowing on affected Loans relating to the periods they were in breach of section 22. According, they are required under section 48 to refund or credit those amounts to the affected customers as soon as practicable. As neither Bank has done that, they are both currently in breach of section 48.
Why register to participate in the class action?
The plaintiffs have applied to the Court for orders that the Banking Class Action proceed on an “opt-out” basis. If the orders are granted, all ASB and ANZ customers who have the same interest in the proceeding as the named plaintiffs will be represented in the Action (and therefore entitled to share in the benefits of any success), unless they proactively elect not to be.
In the interim, we are asking eligible ANZ and ASB customers to register their interest with us which you can do via our registration page.
If you choose to register to participate in the Class Action, you will:
become a party to the contractual arrangements between the Litigtion Funders, the representative plaintiffs and others who have registered to participate;
become a client of the representative plaintiffs’ solicitors, Russell Legal, and party to their terms of engagement;
receive regular updates regarding the progress of the Banking Class Action from Russell Legal.
How will compensation be decided if the legal action is successful?
The plaintiffs in the Banking Class Action are asking the Court to make orders requiring ANZ and ASB to fully refund or credit to affected customers the costs of borrowing the Banks received during the periods they have been in breach of their disclosure obligations under section 22 of the CCCFA.
We expect any successful outcome of the claim to be achieved through either a final judgment of the Court or a negotiated settlements with the Banks. As explained above, the Litigation Funders will be entitled to deduct the costs and Service Fee from the total amount recovered. The remaining sum will be distributed amongst affected borrowers depending on their respective entitlements – that is, how much their Bank was required to refund or credit to them (which in turn will depend on how much they paid in interest and fees during the period their Bank was in breach of section 22).
Will I have to pay anything if the Banking Class Action is not successful?
As explained above, CASL and LPF are jointly funding the Banking Class Action. Except in rare circumstances, they will bear the full costs of the proceedings and any adverse costs awards in the event that the Action is unsuccessful.
It is important to understand, however, that if the Banking Class Action is unsuccessful, or is not as successful as you would have liked, and you have not opted out of the action, you will not be able to pursue the same claims, and may not be able to pursue related claims, against ANZ or ASB in other legal proceedings.
I did have a home loan with ANZ or ASB, but I have since moved banks. Am I still eligible to join the class action?
If you meet the eligibility criteria (click here for eligibility criteria), you will be eligible to participate in the Class Action regardless of whether you are still a customer of ANZ or ASB.
Once I have signed up, will I be asked to do anything else?
The legal team may need to contact you to confirm your eligibility to participate in the Action or to obtain additional details relating to your Loan. Otherwise, the legal team and the representative plaintiffs will run the Banking Class Action and you will not be required to actively participate. You will receive progress updates from the legal team.
Will my personal details be kept private?
Your personal information will only be used for the purpose of the legal proceedings as required by the Court, or by law. The Privacy Act 2020 also applies to any personal information provided.
I received a payment from my bank and was told there’s nothing further I needed to do. How does that payment impact on this legal action?
Both ANZ and ASB admitted to the Commerce Commission that they failed to provide adequate disclosure information to customers and agreed settlement amounts in relation to section 9C(2)(a)(ii) of the CCCFA which requries creditors to exercise the care, diligence, and skill of a responsible lender at all times in all subsequent dealings with a borrower in relation to their loan.
The Banks agreed to make remediation payments to customers who received Loan Variation Letters containing incorrect information (in ANZ’s case) or may not have received any Variation Disclosure at all (in ASB’s case) during the ANZ and ASB Relevant Periods. The remediation amounts paid, do not reflect the full cost of borrowing paid by customers during the breach periods.
The agreements ANZ and ASB entered into with the Commerce Commission very clearly stated the rights of affected customers to take further action against the Banks for their failure to provide accurate and timely disclosure information were not compromised by the settlement with the Commerce Commission.
To read the Commerce Commission settlements, click here:
Why is it appropriate for the banks to have to refund interest and fees, just because they failed to send me the right information?
ANZ and ASB have an obligation to refund the cost of borrowing to customers which they wrongly took because they breached the CCCFA.
The CCCFA clearly states what the consequences are if a bank fails to meet their legal obligations. ANZ and ASB have admitted they didn't provide proper disclosure infromation to customers which they are required by law to do. This means, ANZ and ASB were not legally entitled to charge the costs of borrowing, including interest & fees, and if they do, they must repay this to customers.
This legal action seeks to hold ANZ and ASB accountable for failing to repay more than 150,000 customers the money which the Banks were mot legally entitled to take under the CCCFA.
Actions such as this one play a vitally important role in incentivising compliance with consumer protection laws. These laws are in place to address the power imbalance that exists between and achieving appropriate standards of banking conduct. Consumers rely on their banks to provide them with accurate information regarding their loans so that they know how much they owe and can meet their repayment obligations. Many, if not most consumers cannot or do not look behind the information (and particularly the figures) that the Banks provide. Customers must be able to trust that any information they receive from their bank is accurate and that if a mistake happens, it will be addressed in timely and transparent way.
If there were no consequences for failing to provide consumers with information, or for providing consumers with incorrect information, there would be little incentive for banks to ensure compliance with the law.
I can’t find any information or correspondence from my bank relating to the changes I made to my loan or regarding remediation payments made after settlement with the commerce commission. Will this impact my ability to participate in the claim?
No. We understand that many ANZ and ASB customers who are eligible to participate in the Class Action will not have retained all information relating to their Loans and changes made to them, or correspondence from their Bank relating to remediation payments. The Banks will hold all of this information and can identify the customers who meet the eligibility criteria. We will be seeking such information from the Banks in due course. In the meantime, if you think you may be eligible and would like to participate in the Banking Class Action, we encourage you to register with us.
What if I had a loan with both ASB and ANZ?
You are entitled to make a claim in respect of each and every qualifying Loan you have or had with ANZ and/or ASB. For example, if you had a Loan from ANZ and a Loan from ASB and both of those Loans qualify to join this Action (see the eligibility criteria), you should register twice – once for each Bank.