ANZ pays $85 million settlement over 'predatory' car loans
10/03/2024 11:38 PM
One of Australia’s major banks has settled a class action claim over allegations it used kickbacks to car dealers – a practice outlawed by ASIC.
ANZ bank has agreed to pay $85 million to settle a class-action lawsuit with customers.
The class action alleged ANZ employed “predatory lending practices”, which included secret ‘flex commissions’ to car dealers and high-interest loans for buyers.
Drive understands the Australian Securities and Investment Commission (ASIC) formally banned flex commissions in the car finance industry in 2017.
The flex commissions allowed car dealers to set the interest rate and loan term on car loans – the higher the interest rate, the higher the kickback to the dealer.
MORE: Class action filed against Toyota over alleged dealer finance incentives
“We are very pleased to have achieved this result for consumers,” said Rebecca Gilsenan from Maurice Blackburn law firm, which represented the plaintiffs in the class action.
“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. We acknowledge that ANZ has now put this right for customers,” she said in a written statement provided to Drive.
Another class action headed by Maurice Blackburn alleges Westpac, St George Finance, and Macquarie Leasing also used flex commissions with their car finance products, with that lawsuit to begin in late October 2024.
As reported in January 2024, Toyota’s financial division is facing a class action over alleged flex commissions, with Echo Law representing the plaintiffs.
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