ANZ Settles $85 Million Dispute in Car Loan Commission Case

1

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Bringing this issue to light, prominent law firm Maurice Blackburn Lawyers had initiated multiple class actions, implicating financial institutions including ANZ, Westpac, St George Finance, and Macquarie Leasing. The accusations centered on the employment of "flex commission" systems, which the Australian Competition & Consumer Commission (ACCC) prohibited in November 2018.

In essence, flex commissions permitted car dealerships to control the interest rates and terms of the vehicle loans they arranged. According to Maurice Blackburn, these provisions incentivized dealerships to inflate interest rates and prolong loan durations to secure more substantial commissions from banks.

"In our role as representatives of the affected group members, we contend that these commissions were not only unfair but also unlawful, leading consumers to incur inflated loan interest costs," reads a statement on Maurice Blackburn's website. "Compensation and other forms of redress are sought for those adversely impacted."

Rebecca Gilsenan, the national head of class actions at Maurice Blackburn, hailed the ANZ settlement as a transformative outcome for impacted customers. "This result represents a crucial victory for borrowers who were left paying undue amounts on their car loans," Gilsenan announced on Friday.

Gilsenan emphasized the expectation of borrowers that dealers, distinct from lenders, should provide the most competitive loan rates. She noted the positive rectification by ANZ as they accorded fairness to their past customers.

This outcome, originating from a report by NewsWire, signals the end of a lengthy legal confrontation for ANZ, occurring alongside forthcoming proceedings involving Westpac and St George Finance and Macquarie Leasing at the Victorian Supreme Court, scheduled to resume late October.

Despite agreeing to the settlement, ANZ clarified that it does not admit liability within any of the cases it resolved. "The Esanda class action concerned flex commissions applied to Esanda car loans arranged by dealers from 2011 till the end of March 2016," mentioned a statement from ANZ. Notably, the bank divested its Esanda Dealer Finance holdings in 2016, showcasing its departure from this business model.

Further, ANZ disclosed a $14 million settlement concerning another legal issue related to superannuation fund investments through its formerly owned entities, OnePath Custodians and OnePath Life.

Conclusively, the described settlements require approval from the court, maintaining ANZ's consistent stance of no liability affirmation. Responses from Westpac and Macquarie Bank remain awaited.

Published:Sunday, 6th Oct 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Clear

March 2025: Australian New Car Sales Experience Slight Decline

17 Nov 2025: Paige Estritori

In March 2025, Australia's automotive market recorded a slight downturn, with new car sales totaling 108,606 units-a 0.9% decrease compared to the same month in the previous year. This marginal decline reflects the ongoing economic pressures affecting consumer spending habits. - read more

Green Loans Drive Down Personal Loan Averages in Australia

17 Nov 2025: Paige Estritori

In recent developments within Australia's financial sector, the increasing availability of green loans has begun to influence the average rates of personal loans. Green loans, designed to finance environmentally friendly initiatives such as the purchase of electric or hybrid vehicles and sustainable home upgrades, are typically offered at lower interest rates compared to standard personal loans. - read more

RBA Rate Cuts Provide Mortgage Relief, Personal Loan Rates Unchanged

17 Nov 2025: Paige Estritori

In 2025, the Reserve Bank of Australia (RBA) implemented a series of rate cuts, reducing the cash rate from 4.35% to 3.60%. This move was aimed at alleviating financial pressures on borrowers, particularly mortgage holders. Consequently, most lenders, including the major banks, promptly mirrored these reductions, leading to lower mortgage rates and providing relief to homeowners. - read more

Australia's Electric Vehicle Financing Hits $6 Billion Milestone in 2024

09 Nov 2025: Paige Estritori

In 2024, Australia witnessed a remarkable surge in electric and hybrid vehicle financing, with total loans reaching $6.17 billion-a 50% increase from the previous year. This substantial growth underscores a nationwide shift towards more sustainable transportation options. - read more

Westpac Resolves Auto Finance Class Action with $81 Million Settlement

01 Nov 2025: Paige Estritori

Australia's Westpac Banking Corporation has reached a settlement of A$130 million (approximately $81.84 million) to resolve a class action lawsuit concerning its auto finance practices. The lawsuit, initiated by law firm Maurice Blackburn in 2020, alleged that between March 1, 2013, and October 31, 2018, Westpac and its subsidiary, St George Finance, permitted car dealers to increase interest rates on car loans to earn higher commissions. - read more

Click for more Finance News