ANZ New Zealand faces a $125 million bill after the High Court ruled it breached disclosure law for 17,000 mortgage customers

ANZ Bank New Zealand has lost a long-running class action in the High Court, leaving the country’s largest bank facing potential liability of up to $125 million for failing to make proper disclosures to roughly 17,000 mortgage customers.

The court found that between 6 June 2015 and 28 May 2016 the bank breached section 22 of the Credit Contracts and Consumer Finance Act, the disclosure rule that requires lenders to give borrowers prescribed information whenever the terms of an existing loan are varied. According to Interest.co.nz, the underlying error was small in monetary terms. Customers who altered their loans during the breach window underpaid their mortgages by an average of $2 per month. What turns those small individual amounts into a nine-figure liability is the way CCCFA section 22 works. If a lender fails to disclose properly, it can be ordered to refund all borrowing costs incurred during the breach period, regardless of the size of the original error.

For the lead representative plaintiffs, that meant a refund of $32,728.42, with interest and fees stripped back to zero. Apply that logic across 17,000 borrowers and the upper-bound exposure for ANZ NZ lands around $125 million.

Plaintiffs’ lawyer Scott Russell, who runs the case under the Banking Class Action banner, said the ruling vindicated almost a decade of work. “The Court held that the ANZ breached its disclosure obligations under the CCCFA,” he said. The action is backed by Australian litigation funder CASL and the New Zealand based LPF Group, which together stand to take between 16 and 23.5 percent of any final recovery, fees broadly in line with what funders charge to carry large multi-year class actions through New Zealand’s courts.

ANZ chief executive Antonia Watson said the bank opposes the ruling. “The potential consequences under the current law are disproportionate,” she said, signalling the bank is weighing whether to appeal. Watson has consistently argued that the section 22 remedy, where any disclosure breach can lead to customers being stripped of their borrowing costs in full, is out of step with what the banks consider a proportionate response to the underlying error.

The ANZ judgment lands in the wake of a near-identical case last year. ASB Bank settled its own CCCFA class action in 2024 for more than $135 million, covering a similar period and similar disclosure failings. Between them, the two banks have now agreed or been ordered to pay more than a quarter of a billion dollars over the same legal regime, making this the largest pair of bank versus customer class actions in New Zealand history.

For ANZ shareholders the financial hit is sizeable but absorbable. The bank made $1.26 billion in net profit in the half year to March on a return on equity that comfortably outranks its Australian parent. A one-off $125 million charge would barely shift the bank’s annual run rate. The reputational and regulatory question is more pointed. ANZ becomes the second of the Big Four Australian-owned banks to be found wanting on disclosure after ASB’s settlement, and the natural next question for the market is whether the same playbook will be turned on Westpac or BNZ for the same breach window.

For the 17,000 affected ANZ customers the ruling is genuine money in pocket, although how quickly it arrives depends on whether the bank appeals and how individual claims are quantified. The next phase of the case will work through the formal entitlements of the wider class beyond the lead representative plaintiffs, a process that typically takes months rather than weeks.

For the broader market, the case is a reminder that regulatory tail-risk on legacy lending books has not fully unwound. Most of the big New Zealand banks have spent the last three years cleaning up their compliance systems on the back of the CCCFA reforms, but disclosure errors from a decade ago can still surface as substantial liabilities today. The Banking Class Action group has been running these cases on a clear playbook and it now has two High Court wins to support any future case it chooses to bring.

The case is Banking Class Action v ANZ Bank New Zealand Limited. ANZ has a window to lodge an appeal. Until then, the $125 million figure represents the upper bound of what the bank may end up paying, with the practical liability likely to settle below that ceiling once individual entitlements are calculated and any appeal runs its course.

Have you been an ANZ mortgage customer at any point between mid-2015 and mid-2016, or have you watched one of these big banking class actions unfold? Drop a comment below and tell us what you make of the ruling.