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Westpac Resolves Auto Finance Class Action with $81 Million Settlement

Addressing Past Lending Practices in Australia's Car Loan Sector

Westpac Resolves Auto Finance Class Action with $81 Million Settlement?w=400

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.

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.

This settlement, pending court approval, marks the conclusion of litigation related to the Royal Commission for Westpac. The bank ceased paying such 'flex commissions' in 2018 and stopped new lending through its auto finance business in 2022. The settlement amount was largely accounted for in Westpac's financial update for the first quarter of 2025.

Similarly, in October 2024, ANZ Bank settled a related class action for A$85 million over car loans issued between 2011 and 2016. These settlements highlight the ongoing scrutiny and legal challenges faced by major Australian banks regarding their past lending practices.

For consumers, these developments underscore the importance of transparency and fairness in car financing. Borrowers are encouraged to thoroughly review loan terms and seek clarity on any commissions or fees associated with their loans. Additionally, staying informed about regulatory changes and legal actions in the financial sector can help consumers make more informed decisions when financing vehicle purchases.

Published:Saturday, 1st Nov 2025
Source: Paige Estritori

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

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Finance News

Westpac Resolves Auto Finance Class Action with $81 Million Settlement
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
ASIC's Comprehensive Review Targets Motor Vehicle Finance Practices
ASIC's Comprehensive Review Targets Motor Vehicle Finance Practices
24 Oct 2025: Paige Estritori
The Australian Securities and Investments Commission (ASIC) has commenced an in-depth review of the motor vehicle finance sector, aiming to bolster consumer protections, particularly for borrowers in regional and remote areas, including First Nations communities. This initiative underscores ASIC's commitment to ensuring fair and responsible lending practices across Australia. - read more
Bank Australia Shifts Focus to Electric Vehicle Financing
Bank Australia Shifts Focus to Electric Vehicle Financing
24 Oct 2025: Paige Estritori
In a significant move towards environmental sustainability, Bank Australia has ceased offering loans for new petrol, diesel, and hybrid vehicles as of February 2025. This policy change aligns with the bank's commitment to achieving net-zero carbon emissions by 2035. - read more
Australian Used Car Market Faces Cooling Trends Post-2024 Surge
Australian Used Car Market Faces Cooling Trends Post-2024 Surge
24 Oct 2025: Paige Estritori
The Australian used car market, which experienced robust growth throughout most of 2024, has shown signs of slowing down in the final months of the year. This trend suggests a more cautious outlook for 2025, influenced by various economic factors and affordability concerns. - read more
Westpac Divests Auto Finance Loans to Resimac Group
Westpac Divests Auto Finance Loans to Resimac Group
16 Oct 2025: Paige Estritori
In a strategic move to concentrate on its core banking operations, Westpac Banking Corp has announced the sale of its auto finance loan book to non-bank lender Resimac Group. The transaction is valued between A$1.4 billion and A$1.6 billion and is expected to be completed by the first half of 2025. - read more
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