The $99 Million Legal Cost to Tarnished Bank
Insignia Financial, ANZ, and Zurich Australia have reached a settlement in a class action lawsuit filed in December 2020 which will see ANZ paying $99 million to settle two class action lawsuits.
The lawsuit addressed allegations of excessive fees charged to superannuation funds and inadequate investment returns.
Maurice Blackburn brought three separate class action lawsuits against ANZ, Westpac and St George Finance and Macquarie Leasing for their alleged misuse of flex commission arrangements, mainly Esanda car loans, which were outlawed in November 2018.
Slater & Gordon brought a separate superannuation class action also.
ANZ chief executive Shayne Elliott is under pressure to restore the bank’s reputation after three scandals that also emerged in its bond trading division this year.
ANZ completed the sale of the Esanda Dealer Finance portfolio in 2016
The law firm alleged the banks offered dealers a larger commission for higher interest rates and longer loan terms.
Settlement Details
The total settlement amount is $50 million, with the following contributions:
- OnePath Custodians: $22 million
- ANZ: $14 million (for the superannuation class action) being an action brought by Slater and Gordon related to the investment of funds with ANZ when it owned OnePath Custodians and OnePath Life.
- Zurich Australia: Remaining portion
ANZ will pay the additional $85 million to settle a separate class action related to Esanda car loans.
The class action was filed on behalf of members of the former OnePath Master Fund and Retirement Portfolio Service. It focused on two main issues, interest rates paid on investment in certain cash investment options and grandfathered commissions to financial advisors prior to April 2019.
