ANZ settles credit card class action

ANZ announced it has reached an agreement to settle a class action brought against it by Phi Finney McDonald in 2021. As part of the settlement, the major bank will pay $57.5 million.

According to ANZ, the settlement is covered by a provision held on 30 September 2023 and is “without admission of liability” and remains subject to court approval.

The class action related to certain interest charged on certain ANZ personal credit cards in the period from 1 July 2010 to 1 January 2019.

Legal firm Phi Finney McDonald filed the lawsuit in the Federal Court on behalf of Daniel Tour and other customers over the alleged misconduct during this period in 2021.

The firm had claimed that the major bank harmed its customers by charging interest on purchases that had been repaid on time and retroactively charged them interest on what had previously been interest-free purchases.

In addition, it was alleged that the manner in which ANZ had charged interest also made it impossible for the average credit card holder to understand how interest would be calculated and how much they would be charged.

Charging retroactive interest on credit cards with an interest-free period has been outlawed since 1 January 2019, through an amendment to the National Consumer Credit Protection Act 2019.

The lawsuit was funded by Woodsford Litigation Funding, Phi Finney McDonald confirmed at the time of the lawsuit’s filing.

Disclosure failure

In October 2023, the Federal Court found that ANZ had breached its continuous disclosure obligation by failing to inform the market about $750 million given to underwriters in a case brought forward by the Australian Securities and Investments Commission (ASIC).

Justice Mark Moshinsky of the Federal Court of Australia found ANZ breached this obligation by failing to notify the Australian Securities Exchange (ASX) prior to commencement of trade of the underwriter acquisition information or the signification proportion information.

ASIC alleged that JP Morgan, Citigroup Global Markets, and Deutsche Bank had acquired between $754 and $790 million from ANZ’s $2.5 billion institutional share placements on 6 April 2015.

ASIC’s case alleged ANZ contravened the Corporations Act by failing to notify the ASX that about $791 million of the $2.5 billion in ANZ shares offered in the placement was instead to be acquired by its underwriters rather than with the investors.

Further to this, ASIC contended that if the information had been disclosed, “persons who commonly invest in securities would have held an expectation that the underwriters would promptly dispose of allocated or acquired placement shares, and in doing so place downward pressure on ANZ’s share price”.

[RELATED: Court rules on ANZ’s alleged $2.5bn disclosure failure]