ANZ will pay $85 million to members of a class action lawsuit over flex commissions used in dealer-arranged car loans, after settling the matter out of court.
Maurice Blackburn lawyers alleged ANZ engaged in predatory lending practices that saw customers stung with high interest loans from car dealers.
The lawsuit alleged that flex commission arrangements allowed car dealers to set higher interest rates and longer loan terms, to receive larger commissions.
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ASIC banned such arrangements in 2018.
Maurice Blackburn’s national head of class actions Rebecca Gilsenan said the settlement was a historic win for consumers who had paid far too much for their car loans.
“We are very pleased to have achieved this result for consumers. They had a right to expect that dealers were offering the best rate because they understand the roles of car dealers and lenders are distinct,” Gilsenan said.
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“We acknowledge that ANZ has now put this right for customers.”
ANZ said in a statement it had settled the class action lawsuit “related to the use of flex commissions in dealer arranged Esanda car loans in the period from January 1 2011 to March 31 2016”.
ANZ completed the sale of its Esanda Dealer Finance portfolio in 2016.
The bank noted the settlement did not carry an admission of liability.
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Maurice Blackburn is also leading a flex commission class action trial against Westpac and St George Finance and Macquarie Leasing, which will begin later this month in the Victorian Supreme Court.
“We will continue to fight for customers of Westpac and Macquarie to be justly compensated for secret commissions paid by the banks that had them overpaying because of predatory caryard finance practices,” Gilsenan said.
The plaintiffs, on behalf of group members in all three class actions, 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.
They are claiming compensation and other relief for those who have been affected.
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