ANZ has agreed to settle a pair of class actions, one concerning one that plaintiffs termed predatory lending.
Maurice Blackburn Lawyers on Friday said it settled this class action with ANZ for $85 million over lending practices “that saw car dealers sting customers with high interest loans involving secret flex commissions kickbacks from the bank.”
Flex commission arrangements allowed car dealers to set the interest rate and loan term on car loans. The higher the interest rate and the longer the loan term, the greater the commission received by the dealer.
These arrangements were banned by ASIC in November 2018 and were a subject of inquiry at the Financial Services Royal Commission.
Maurice Blackburn’s national head of class actions Rebecca Gilsenan said “consumers had a right to expect that dealers were offering the best rate because they understand the roles of car dealers and lenders are distinct.
“We acknowledge that ANZ has now put this right for customers,” Gilsenan said.
The settlements are covered by existing provisions held at 30 September 2024” ANZ said.
“The settlements are without admission of liability.”
A Flex Commission class action trial against Westpac Banking and St George Finance and also against Macquarie Leasing is scheduled to begin later this month in the Victorian Supreme Court, Maurice Blackburn said.
In all three class actions, the plaintiffs allege that flex commissions were unfair and unlawful and resulted in consumers paying higher interest rates on their car loans than they otherwise would have.
As a result, they are claiming compensation and other relief for those who have been affected.