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How banks tried to shut down multi-million dollar legal threat, but failed

Stuff | 21 November 2021

Written by Rob Stock

In June 2015​, the National government led by Sir John Key created the law that would be used this year​ to launch a class action lawsuit against ANZ by home loan borrowers.

Key, ANZ’s current chairman, was at the helm when section 99(1A)​ of the Consumer Credit Contracts and Finance Act (CCCFA) came into force as part of a drive to get lower tier lenders to treat vulnerable borrowers decently.

The clause required lenders to refund all costs of borrowing, meaning fees and interest charged, during a period in which they were in breach of loan disclosure laws designed to ensure borrowers were fully informed about their loans.

But in May ​2016, ANZ realised it had made errors in loan variation letters sent to thousands of customers between May 2015 and May 2016​ potentially leaving it on the hook to pay a large sum to those borrowers.

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