Dispute relates to alleged failures to provide compliant variation disclosures under the Credit Contracts and Consumer Finance Act 2003 (CCCFA)
Commonwealth Bank’s wholly owned New Zealand subsidiary ASB has agreed to pay NZ$135.625 million ($119.7 million) to settle a class action lawsuit filed in September 2021.
In bringing the class action, plaintiffs alleged that ASB failed to provide compliant variation disclosures under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
A compliant variation disclosure is a formal disclosure that a lender must provide to a borrower when there are agreed changes to the terms of a consumer credit contract.
It is required to ensure borrowers are fully informed about any changes to their contract, such as adjustments to interest rates, fees and repayment schedules.
Plaintiffs sought a repayment on interest or fees paid during the period which ASB allegedly did not provide the adequate disclosures.
“In agreeing to resolve the litigation, ASB makes no admission of liability,” CommBank said in an ASX regulatory filing.
According to the ASX filing, the settlement is subject to approval by the High Court of New Zealand. CommBank will seek directions from the Court regarding the process for notifying class members about the settlement.
A concurrent class action against ANZ is ongoing.
