The High Court has ruled that more than 150,000 customers of ANZ and ASB banks will be part of legal action for breaches of credit laws.
File photo. Photo: RNZ / DOM THOMAS
While the case was originally brought by by a handful of customers, the court ruled that this would include all affected customers unless they opted out.
The class action, which is being jointly financed by New Zealand-based LPF and Australia-based litigation funder CASL, is for breaches of 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 solicitor for the class action, Scott Russell, said the decision was significant.
"Importantly, all of these customers are now part of the claim and will have the opportunity to get back the money our claim alleges their bank was not entitled to charge or take from them. Unless they elect to opt-out of the claim."
ASB is being sued by customers who had a home loan or personal loan between 6 June, 2015, and 18 June, 2019, and who requested a variation to their loans during that period.
They alleged that ASB did not provide the disclosure required by the CCCFA and was not entitled to retain the cost of borrowing and fees during the relevant period.
The claim against ANZ relates to a faulty loan calculator used between 30 May, 2015, and 28 May, 2016.
Both banks admitted the breaches, came to an agreement with the Commerce Commission and recompensed the affected customers, totalling $43.5 million.
Russell said the opt-out ruling meant many customers, who might not have realised or understood that they were eligible to participate, would now be covered by the action.
"In addition, for an individual, it is highly unlikely they would ever be able to afford to take a legal claim against a well-funded defendant like a bank."
He said customers of the two banks would be able to decide for themselves about the claim.
"It also reduces the potential for unnecessary challenges by the banks and their insurance companies to delay the proceedings, which only adds time and cost to the case but doesn't address the merits of the claim," Russell said.
Both banks are defending the action.