ANZ will pay A$57.5 million as part of the settlement of a class action brought against it in 2021 over interest charges on credit cards.
Acting for the representative applicant, law firm Phi Finney McDonald claimed that between 2010 and 2018 the bank charged interest retrospectively on credit card accounts that previously had an interest free period.
It also claimed that the bank was not transparent with its customers about the way it charged this interest and that customers had no ability to determine the amount of retrospective interest they would have to pay.
The practice of imposing interest charges retrospectively on a credit card account that had an interest free period was banned in 2019, following the passage of Treasury Laws Amendment (Banking Measures No.1) Act 2018.
The information memorandum accompanying the bill said “the complex nature of the calculation [of retrospective interest charges] means that industry practice may not align with consumers’ understanding and expectation about how interest is to be charged in the event a credit card balance is not paid off in full by the payment due date.”
The amendment standardised and simplified the application of interest to credit card balances when the balance is only partly paid off in a statement period. Interest charges could no longer be backdated
ANZ said in a statement that the settlement was made without admission of liability and remains subject to court approval.