Power List lawyers acting on major class action
A major class action filed in Auckland today against the ANZ and ASB banks is seeking repayment of interest and fees to 150,000 customers for alleged breaches of the consumer protection laws.
The action is jointly funded by Australia-based litigation funder CASL and New Zealand litigation funder LPF Group who are managing the action. The action seeks repayment of monies to customers that the banks were not permitted to keep, according to a press release issued by the class action funders today.
The action is being run as an opt-out class action by Scott Russell of Auckland law firm Russell Legal and barristers Davey Salmon QC (left) and Ali van Ammers of Mills Lane Chambers.
The press release said the Banks’ actions have seen them unfairly profit from their unwitting customers through a failure to adhere to their disclosure obligations under the Credit Contracts and Consumer Finance Act, (CCCFA) upon which the action is being taken.
The Banking Class Action seeks orders requiring the Banks to refund interest and fees they were not entitled to charge or keep on home and personal loans due to breaches of their disclosure obligations.
“Failing to refund money they’re not legally entitled to is not only wrong, it undermines the trust consumers have in these important institutions. 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,” says Anthony Simons, an ASB customer and a representative plaintiff in the Banking Class Action.
Disclosure Breaches By Banks
Both ANZ and ASB raised the disclosure issues that occurred over the Relevant Periods with the Commerce Commission and both entered into settlement agreements with the Commission pursuant to which they admitted to breaches of section 9C(2)(a)(iii) of the Credit Contracts and Consumer Finance Act (CCCFA), which requires creditors to exercise the care, diligence, and skill of a responsible lender at all times in all subsequent dealings with a borrower in relation to their loan. (They were able to avoid admitting breaching section 22.)
The settlement agreements entered into with the Commerce Commission provides that the rights of affected customers to take further legal action against ANZ and ASB for their failures to provide accurate and timely disclosure information were not compromised by the
settlements with the Commerce Commission.
“ANZ and ASB think by admitting to breaking the law, the consequences don’t apply to them. Hiring expensive lawyers and agreeing to significantly reduced payments with regulators means the Banks have avoided repaying what they owe to their customers. 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.
ANZ and ASB home and personal loan customers can find out more at the website www.bankingclassaction.com
“ANZ and ASB are massively profitable, very powerful banks with access to significant legal and compliance resources. As individuals, we are completely dependent on them to act responsibly and comply with the law when they’re dealing with our money. It’s critical ANZ and ASB honour their legal obligations to New Zealanders under consumer protection laws,” said Simons.
Banking Class Action solicitor Scott Russell says, “The CCCFA is very clear. If a bank fails to comply with its disclosure obligations, it is not legally entitled to charge interest or fees on the affected loan until the failure is remedied. 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. In this case, the Banks have continued to charge interest and fees despite not being entitled to do so. The Banks’ failures to refund their customers constitute serious breaches of the provisions of the CCCFA.”
Important Class Action
CASL Managing Director, Stuart Price said “This is one of the most important class actions we have 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.
“Extensive reviews into the culture and conduct of Australasian retail banks identified significant issues and a lack of accountability. 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 are co-funding the action with us and managing this case on behalf of both litigation funders.”
LPF Group Director, Phil Newland (right) says “The recent Supreme Court decision that approved Opt-Out class actions expressly had consumer related claims in mind. This is an excellent example of an important case that should be taken.”
The Hayne Royal Commission Report into the culture and conduct of Australasian retail banks
highlighted significant misconduct issues and a culture that lacked accountability. The report
identified the need for risk and compliance teams to install clear frameworks with regards to
regulatory breaches to ensure there is no delay with informing clients or delivering remediation.