ASB has agreed to pay $135.6 million to settle a class action for alleged breaches of the Credit Contracts and Consumer Finance Act (CCCFA).
The claim, which was first filed in 2021, suggested both ASB and ANZ NZ had failed to refund more than 150,000 customers interest and fees they were not entitled to charge.
The class action related to disclosure documents which the bank was required to provide to customers who had requested changes to their lending arrangements between 2015 and 2019 – and whether one potential interpretation of the CCCFA legislation was the correct one.
As part of the settlement, ASB made no admission of liability or wrongdoing.
Scott Russell, who represented the ASB plaintiffs, said the settlement was a positive outcome for affected customers.
“After four years of litigation, settlement provides certainty, avoiding what would otherwise be a very long and expensive fight through the courts. It importantly also removes the risk around the Government’s proposed retrospective law change in the CCCFA Amendment Bill,” he said.
ASB chief executive Vittoria Shortt 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.”
“We continue to strongly support the CCCFA Amendment Bill currently before Parliament’s Finance and Expenditure Select Committee, which will bring clarity to this confusing piece of legislation.”
As this stage, the settlement is subject to approval by the High Court, which ASB said make take “several months”.
ASB plaintiffs will seek directions from the court for the process for communicating with potential class members about the settlement.
At this stage, ASB customers were advised they did not need to do anything, and will receive further information in due course.
In a statement to 1News this afternoon, ANZ said it would continue to defend its case.
"The potential consequences under the current law are disproportionate and not aligned with any actual harm caused," it said.
ANZ NZ said it had already been subject to an investigation and enforcement action by the Commerce Commission in relation to the issues that are subject to the class action, after it "self reported" those issues.
"ANZ NZ agreed to pay more than $35 million to affected customers, leaving them all better off than they would have been if the issue hadn’t occurred."
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