750,000 CBA customers receiving class action letters

Slater and Gordon says more than 750,000 people will today receive a Federal Court notice advising they may be eligible to be part of a consumer credit insurance class action against Commonwealth Bank.

The action alleges that many people were sold “junk” credit card and personal loan insurance that was of little or no value and that many customers would not have been eligible to make successful claims.

The firm has also commenced similar class actions against ANZ and Westpac, while a suit against NAB in 2019 secured a $49.5 million settlement.

Slater and Gordon says Commonwealth Bank had said it would provide refunds as part of a remediation program, but only a small portion of customers had been compensated, despite sale of the products ending in March 2018.

“This move to return only a small portion of its customers premiums seems to have been a tokenistic effort to protect the bank’s brand, rather than a genuine attempt to make good its past wrongdoing,” Practice Group Leader Andrew Paull said.

Consumers may be eligible to join the action if they were issued with a consumer credit insurance policy since January 1 2010, have paid a premium and have not been paid back in full.

More than two million people have now received court-ordered notices advising they may be eligible to participate in one of the four class actions, which is part of the Get Your Insurance Back campaign.

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ANZ Bank share price under scrutiny after settling US class action

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price could be on the move this morning.

This follows the release of an update on a class action brought against it in the United States during 2016.

What was the class action?

Back in 2016, ANZ confirmed that it was among 17 banks and two international brokerage houses that were named in a class action complaint launched in the United States by two US-based investment funds and an individual derivatives trader.

This related to allegations of the rigging of the bank bill swap rate (BBSW) and bank trading in the United States. 

The BBSW is an independent reference rate that is used for the pricing securities.

In 2017, ANZ acknowledged to ASIC that, during the course of trading on the BBSW market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012. 

The bank also admitted that it did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders.

What was today’s update?

This morning ANZ announced that it has reached an agreement to settle the class action brought against it in the United States during 2016.

The settlement is without admission of liability. It also remains subject to negotiation and the execution of complete settlement terms, as well as court approval.

The good news for shareholders, and also the ANZ share price, is that while the terms of the settlement remain confidential, the financial impact of the settlement will not be material.

The bank has not commented on the settlement today. 

However, back in 2017, the company’s Chief Risk Officer at the time, Nigel Williams, commented on the issue.

He said: “We know our customers and the community expect better from us and we apologise for both the attempted unconscionable conduct and our inability to prevent or detect the behaviour.”

ANZ share price performance

The ANZ share price is up over 22% since the start of the year. 

Investors will no doubt be hoping this strong run can continue now this issue is behind the bank.

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