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The High Court has ruled against ANZ in a class action brought by thousands of borrowers, finding the bank breached its disclosure obligations under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
The case relates to a system error between May 2015 and May 2016, when ANZ failed to include accrued but uncharged interest in its calculations due to a coding issue. As a result, loan variation letters sent to customers contained incorrect repayment information. While the discrepancy was relatively small—about $2 per month—the court found the error to be materially significant over the life of the loans.
At the time, the CCCFA required lenders in breach of disclosure rules to refund all interest and fees charged during the period of non-compliance. The class action covers around 17,000 customers who were affected and, on average, underpaid their mortgages.
ANZ had earlier identified the issue itself, reported it to regulators, and paid more than $35 million to compensate customers. Chief Executive Antonia Watson said the bank believed the law was not intended to impose such severe consequences for what it considers minimal harm, and confirmed ANZ is reviewing the decision, including a possible appeal.
However, the court emphasised that accurate disclosure is essential for informed consumer decisions. Justice Geoffrey Venning noted that even small errors can undermine trust, reduce transparency, and distort competition in the lending market.
The ruling means affected borrowers are not liable for borrowing costs during the breach period, with initial refunds already ordered. ANZ estimates its total potential liability could reach up to NZ$125 million as the judgment is applied across the full class. The decision is also expected to have wider implications for how disclosure obligations are enforced in future banking and lending disputes in New Zealand.
-TIN Bureau
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