ANZ Settles Class Actions for A$99 Million

(Reuters) – Australian lender ANZ announced on Friday it will pay a combined sum of A$99 million ($67.76 million) to settle two class actions from 2020.

Class Action 1: Car Loans

The first class action was on behalf of individuals who entered into car loans issued under ANZ’s credit license from 2011 to March 2016, alleging that “flex commissions” were paid to ANZ-accredited car dealers by the lender.

Flex commission arrangements allowed dealers to set interest rates and terms on car loans. The higher the interest rate and longer the loan term, the greater the commission received by the dealer. These arrangements were banned by Australia’s securities regulator on November 1, 2018. ANZ will pay A$85 million to settle this car loan class action.

Class Action 2: Superannuation Products

The second class action was filed for members of ANZ and its former unit’s OnePath superannuation products, alleging that the trustee of the pension funds breached its duties by charging excessive fees to pay unnecessary commissions to financial advisers. ANZ will pay A$14 million to settle this superannuation class action.

ANZ clarified that the settlements are made without admission of liability and are subject to court approval.