ASB is facing a class action lawsuit against some of its clients who had personal and home loans. Photo / File
A multi-million dollar class action lawsuit has been launched against ANZ and ASB banks over allegations that they failed to fully reimburse around 150,000 customers for fees and interest charged on loans for which there were violations of disclosure.
The case is brought by former Trade Commission attorney Scott Russell and attorneys Davey Salmon, QC, and Ali van Ammers, and is jointly funded by Australian funder CASL and New Zealand funder LPF Group.
The claim relates to two Trade Commission regulations with banks in which the two admitted to failing to provide accurate information to personal and home loan customers who changed the terms of their loans during a given period.
In May of this year, ASB agreed to pay a settlement of $ 8.1 million to 73,000 customers after being unable to confirm that it had sent written information to those who made loan changes between the 6 June 2015 and June 18, 2019.
In March of last year, ANZ agreed to pay approximately 100,000 customers $ 29.4 million after confirming that it miscalculated the loan interest amount from May 30, 2015 to May 29, 2016, in due to a coding error in a used loan calculator. by its front-line banking staff.
Lawyers allege that although banks have made some reparation payments to affected customers, that reparation is only a fraction of what customers are entitled to under the Credit Agreements and Financing Act 2003. of consumers.
Russell said the law was very clear.
“If a bank fails to meet its disclosure obligations, it is not legally permitted to charge interest or fees on the affected loan until the breach is remedied.
“To the extent that a bank receives interest or charges to which it is not entitled, it should reimburse or credit these amounts to the customer as soon as possible.”
Russell said that in this case the banks continued to charge interest and fees when they were not allowed to do so.
“The non-repayments of banks to their customers constitute serious breaches of the provisions of the CCCFA.
The Herald has solicited comments from ASB and ANZ banks.
The lawyers are trying to initiate a class action opt-out, which means everyone involved will be part of the case unless they opt out.
CASL chief executive Stuart Price said the case was one of the largest class actions it has funded.
“This goes to the heart of the enormous power imbalance that exists between banks and their individual customers, who without litigation funding simply would not have the resources to take legal action against ANZ and ASB for their serious shortcomings. . “
He said extensive reviews of the culture and conduct of Australasian retail banks identified significant issues and a lack of accountability.
“We hope this class action lawsuit will encourage better service and respect for all of the bank’s customers, deter future violations and improve regulatory compliance.”
If the case is successful, clients will receive the amount paid by the bank, less project costs such as legal fees and service charges payable to donors which would vary between 16 percent and 23.5 percent.
Customers who think they may be affected can find out more at www.bankingclassaction.com.
Bruno Bickerdike, an ASB client who is a representative plaintiff in the case, said he previously had a mortgage with the bank for about $ 565,000 and changed it to a revolving line of credit for undertake a renovation.
He had since transferred his mortgage to another lender after buying another house, but he still had his personal accounts with ASB.
Bickerdike discovered the potential lawsuit through Russell.
“He mentioned he was working on a case involving the banks and I said I was with ASB and he said I might be affected.”
Bickerdike recalls receiving a notification from the bank for a refund of $ 129 and something to do with the charges.
“I hadn’t really clicked at the time that there was obviously fees and interest as well as the principal. So I thought it was something to do with ATM fees. . “
He said it opened his eyes to better understand what was going on behind the scenes, but wasn’t sure exactly how much more the bank could owe him.
“I almost don’t want to accumulate because I don’t know, even if we succeed, I don’t know if they will try to settle down and if they will offer part of the amount. But with a mortgage loan relatively young, most of the monthly amount is interest, not the principal. Even if it was only 18 months, it is starting to get reasonably large. “
But he said it wasn’t really about the money.
“Rather, it’s the principle that no one controls the banks and their behavior makes them think they are above the law. So there is no one to protect the little people and the banks are making obscene profits. better.”
Bickerdike encouraged others potentially affected to reach out.
“I don’t know if everyone has received a notification from their bank and I don’t know if everyone has received a token amount payment, but I guess they have if you are not sure to contact and this can be checked to see if they have been affected. “
Anthony Simons, another ASB client who is also a representative plaintiff, said the claim related to a previous mortgage he had with the bank which was approximately $ 500,000.
Simons said he learned of the claim through a business relationship with the legal team.
“I went back to my bank account and spotted the amount. I didn’t think about it. I didn’t even quite understand what it was at the time. was not really clear. “
He said he just trusted the bank to do the right thing.
“When I found out the extent of what it could be and what actually happened and that it had been through the Trade Commission and how many people had been affected and the fact that the Commission trade had found them guilty. It made me feel a little yuck. “
Simon said it was undermining consumer confidence in banks.
“If the money paid by customers is not kept by the banks, then they should give it back. Not just a part, but all.”