ANZ loses $125m CCCFA class action, considers appealing High Court decision

ANZ has to reimburse customers affected by the CCCFA breach all their borrowing costs for the duration of the breach. Photo / Alex Burton

ANZ customers have won a class action taken against the bank, which could cost it $125 million.

High Court Justice Geoffrey Venning has ruled some of ANZ’s lending breached the Credit Contracts and Consumer Finance Act (CCCFA) in the mid to late-2010s.

A coding error in one of ANZ’s loan calculators saw it charge about 17,000 customers the wrong amount of interest.

While ANZ reported the issue to the Commerce Commission, and paid customers more than $35m to rectify the mistake, the issue the court sought to clarify was whether ANZ was required to reimburse customers all the borrowing costs (including interest) they paid for the duration of the breach.

Justice Venning ruled ANZ did in fact need to do so.

The bank estimated this could cost it as much as $125m, depending on how the judgment was applied to those captured by the class action.

It said it was considering the judgment and whether it would appeal the court’s decision.

The lawyer representing the customers in the class action, Scott Russell, said: “The next step in the proceeding will depend on a number of factors, including whether ANZ appeals.

“This judgment is an important step in holding ANZ accountable under consumer protection legislation designed to ensure borrowers receive accurate information about their loans.”

ANZ chief executive Antonia Watson was disappointed with the court’s findings.

“We opposed the claim because we felt strongly that the law was not intended to operate in the way the plaintiffs and the litigation funders suggested,” she said.

“We maintain that the potential consequences under the current law are disproportionate and not aligned with any actual harm caused.”

Watson noted ANZ’s errors saw customers pay less, not more, interest. They had also already been paid out more than $35m.

“As a result, all customers were left better off than they would have been if the issue had not occurred,” she said.

ASB was also captured by the same class action.

In October, it agreed to a settlement of nearly $136m, but didn’t admit to any wrongdoing. It has been paying out customers since.

The Government is in the process of amending the version of the CCCFA that applied to the period between 2015 and 2019, so that the default penalty for a lender that discloses inaccurate information about a loan is no longer for the lender to reimburse the borrower all the borrowing costs they paid for the duration of the breach.

Once the law is updated to align more with the current iteration of the CCCFA, penalties will have to be fair and equitable.

The updated law won’t be applied to the class action against ANZ.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.

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