A New Zealand law firm has filed a multimillion-dollar class action against two Australian-owned Kiwi banks on behalf of 150,000 home and personal loan customers.
In Auckland high court proceedings, Russell Legal claims the customers are entitled to the return of interest and fees paid on loans taken out from ASB Bank, which is owned by the Commonwealth Bank, and the New Zealand arm of ANZ.
Solicitor Scott Russell said that under New Zealand law the banks were not allowed to charge interest or fees on loans when they had not properly disclosed terms and conditions to customers.
The amount sought could be in excess of $100m due to the large number of customers and the inclusion of home loans, which usually have much higher balances than personal loans.
Both ANZ New Zealand and ASB have already reached settlements with New Zealand’s Commerce Commission in which they admitted to breaching the law by failing to keep customers properly informed.
ANZ has agreed to pay more than NZ$35m to customers over breaches between 30 May 2015 and 28 May 2016 while ASB has agreed to pay NZ$8.1m over breaches between 6 June 2015 and 18 June 2019.
However, Russell said that under the Credit Contracts and Consumer Finance Act customers were entitled to a refund of all the interest and fees they paid while the breaches were occurring.
“In this case, the banks have continued to charge interest and fees despite not being entitled to do so,” he alleged.
“The banks’ failures to refund their customers constitute serious breaches of the provisions of the CCCFA.”
Anthony Simons, an ASB customer who is participating in the class action as a representative plaintiff, said the settlements the banks struck with the Commerce Commission were not enough.
“Hiring expensive lawyers and agreeing to significantly reduced payments with regulators means the banks have avoided repaying what they owe to their customers,” he said.
“Banks are the first to enforce the rules when they are owed money, yet they ask for leniency when they break the law. If we do not challenge this kind of behaviour, we are condoning it and allowing it to continue.”
The lawsuit is being bankrolled by two funders: Australia’s CASL and New Zealand’s LPF group.
An ANZ spokeswoman said the bank would defend the claim.
“ANZ considers we have fairly remediated our customers and the matter has already been subject to regulatory oversight and resolution,” she said.
CBA has been approached for comment.