ANZ has settled a class action brought against it by law firm Maurice Blackburn for $85 million, after it was accused of predatory lending practices outlawed by the Australian Securities and Investments Commission (ASIC).
The big four bank was accused of paying ‘flex commissions’ to car dealerships, a practice made illegal by ASIC back in 2017. It involves letting car dealers set the interest rates on ANZ-backed car loans and premiums for insurance sold through their dealerships, and paying flexible commissions based on that.
You can probably see that this incentivises the dealers to set loan and insurance rates as high as possible and to pressure people into signing up who might be able to get a better deal elsewhere.
ASIC outlawed the practice as part of reforms aimed at allowing people to compare fees and charges between companies more clearly.
But while $85 million sounds like a lot, there are around one million people affected by the decision, which works out to $85 each.
Rebecca Gilsenan, heat of class actions at Maurice Blackburn told news.com.au people expect a separation between car dealers and banks.
“We are very pleased to have achieved this result for consumers,” she said.
“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.
Were you a part of this class action? Have you financed a car or bought insurance through a car dealership since 2017?
.
