The lawsuit is against ASB and ANZ banks for overcharging customers.
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- Select committee scene of banks vs consumer battle over law change
- Class action of 150,000 ASB and ANZ bank customers opposes amendments to CCCFA
- Claims changes could undermine their claims retrospectively
- Banking sector refutes claim of influencing law change
- Claimants offer to settle for $300m, ANZ/ASB already paid $43m in deal
- ANZ rejects settlement offer as a “stunt”
Claimants in a class action law suit against the ANZ and ASB banks have offered to settle a four-year case for breaches of credit laws for more than $300 million.
The offer has been disclosed at the finance and expenditure select committee hearing into proposed amendments to the credit contracts and consumer finance act (CCCFA), to close loopholes which might expose banks and other financial services companies to action for historic minor breaches of the laws.
The law suit involves more than 150,000 customers of the two banks affected between 2015 and 2019 over breaches of the laws for not making proper disclosures resulting in overcharging of fees and interest.
“We’re making this offer to protect our clients and the country from the uncertainty National [government] will create if it pushes these amendments through,” the lawyer leading the class action Scott Russell said.
The consumer group claims proposed changes to the act could retrospectively undermine their legal action.
“If passed, the amendments would apply retrospectively specifically targeting the class action. They would allow the banks to argue for reduced refunds or to erase them altogether – effectively giving them a free pass for misconduct between 2015 and 2019.”
The class action was being jointly funded by Australia-based litigation funder CASL and New Zealand litigation funder LPF Group, which would take a percentage of any settlement or court award.
Settlement rejected
ANZ speedily rejected the settlement offer as a “stunt”.
“The proposed settlement appears to be primarily driven by the financial interests of the litigation funders and the proposed resolution does not reflect the nature or scale of the underlying issue,” the bank said in a statement.
“The litigation funders are worried because their claim is not just or equitable but instead involves them getting a potential windfall from unclear and bad law.”
The banking industry has also claimed that the loopholes if not fixed might result in a $13 billion threat to the financial system.
One of the class action counsel Davey Salmon KC told the select committee the industry’s claims were not real.
“There is not a menace here.”
“Nor is there a major exposure for the banks, it is not said by the banks… that there is a high level of risk from this claim. The sum sought will not affect the viability or the balance sheets materially of either defendant bank.
“The plaintiffs have in recent times sent an indicative proposal for a settlement in the order of $306 and $309 million.”
ANZ and ASB have already paid more than $43m to recompense affected customers in a settlement with the Commerce Commission back in 2020.
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