A multi-million dollar class action claim has been filed in the Auckland High Court against Australian-owned banks ANZ and ASB for their failure to refund fees to 150,000 customers.
Photo: RNZ / Dom Thomas
The class action against ANZ and ASB was being brought under the Credit Contracts and Consumer Finance Act (CCCFA) for the banks failing to fully refund customers' interest and fees they were not entitled to charge due to breaches of their disclosure obligations.
The class action was being jointly funded by Australia-based litigation funder CASL and New Zealand litigation funder LPF Group.
Class action solicitor Scott Russell said the banks previously admitted liability and paid back some millions to customers as part of a public settlement with the Commerce Commission, but that did not stop customers from taking a private action against the banks.
"To the extent a bank receives interest or fees it is not entitled to, it must refund or credit those amounts to the customer as soon as practicable," Russell said, adding that the banks were yet to disclose how much in fees and interest costs would be subject to a refund, and getting that detail would be the next step in the action.
"The banks' failures to refund their customers constitute serious breaches of the provisions of the CCCFA."
"If the money paid by customers is not the banks' to keep, then they should give it back. Not just a portion of it, but all of it," ASB customer and a representative plaintiff in the action Anthony Simons said.
"ANZ and ASB think by admitting to breaking the law, the consequences don't apply to them. If we do not challenge this kind of behaviour, we are condoning it and allowing it to continue."
CASL managing director Stuart Price said the case was one of the most important class actions the company had ever funded.
"It goes to the heart of the huge power imbalance that exists between banks and their individual customers, who without litigation funding would simply not have the resources to pursue legal action against ANZ and ASB for their serious failings," Price said, adding the action followed an extensive review into the culture and conduct of Australasian retail banks.
"We hope this class action will encourage better service and respect for all bank customers, deter future breaches and improve regulatory compliance."
New Zealand-based litigation funder LPF Group were co-funding the action, with the two funders expected to share in 16.5 percent of the proceeds of the action, if it succeeded.
"The recent Supreme Court decision that approved opt-out class actions expressly had consumer-related claims in mind," LPF Group director Phil Newland said.
"This is an excellent example of an important case that should be taken."
Russell said it was unclear how much money each of the 150,000 customers would receive as the banks were yet to provide any documentation to show much customers paid in fees and interest over period in question.