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Case updates

The Westpac Car Loan Class Action and Esanda Car Loan Class Action are currently underway. The next step is known as ‘discovery’. The Macquarie Car Loan Class Action has been filed but not yet served.

 

Key dates

Registration is now open.

Am I eligible to join this class action?

Maurice Blackburn has filed three class actions relating to car loans.

  • The first class action was filed in the Supreme Court of Victoria on 15 July 2020 against Westpac and St. George Finance Limited (Westpac Car Loan Class Action).
  • The second class action was filed in the Supreme Court of Victoria on 21 August 2020 against ANZ and Macquarie Bank for Esanda car loans (Esanda Car Loan Class Action).
  • The third class action was filed in the Supreme Court of Victoria on 14 October 2020 against Macquarie Leasing (Macquarie Leasing Car Loan Class Action).
     
  1. Westpac Car Loan Class Action. You are eligible to register your interest if you had a car loan between 1 March 2013 and 31 October 2018 issued under Westpac or St George’s credit licence (including Bank of Melbourne) that was organised by a car dealer.

  2. Esanda Car Loan Class Action. You are eligible to register your interest if you had a car loan between 1 January 2011 and 31 March 2016 issued under ANZ’s credit licence that was organised by a car dealer. The class action includes car loans that started with Esanda and were transferred to Macquarie Bank / Macquarie Leasing. Please note that car loans directly from Macquarie Leasing are not part of this class action, see the Macquarie Leasing Car Loan Class Action section below. 

  3. Macquarie Leasing Car Loan Class Action. You are eligible to register your interest if you had a car loan between 1 March 2013 and 31 October 2018 issued under Macquarie Leasing’s credit licence that was organised by a car dealer. Please note that car loans that started with Esanda and then were transferred to Macquarie Leasing are not part of this class action, see the Esanda Car Loan Class Action section above.

Signing up to the class action will not expose you to any upfront costs. All costs in the proceeding will be borne by Maurice Blackburn unless and until there is a successful outcome. In the event of a successful outcome, any costs payable by Maurice Blackburn will be deducted from, and will not exceed, any compensation that you're entitled to receive. All such costs are required to be considered and approved by the Court.

Find out more about the registration process. 

About these class actions

The class actions are about the ‘flex commissions’ paid to car dealers by Westpac, St George, ANZ and Macquarie Leasing. The class actions allege that ‘flex commissions’ were unfair because they resulted in consumers paying a higher interest rates on their car loans. Flex commission arrangements allowed car dealers to set the car loan interest rate at a higher rate of interest than they would otherwise have been. The banks or finance companies paid the flex commissions because it incentivised the dealers to set interest rates at higher levels. The practice was banned by ASIC on 1 November 2018. The car dealers are the representatives of the banks or finance companies in relation to the car loans and the banks or finance companies are responsible for their actions.

Maurice Blackburn is no longer investigating other potential class actions in relation to flex commissions.

In a flex commission arrangement:

(a) the bank fixed a ‘base rate’ of interest that could be charged under a car loan agreement;
(b) the motor dealer or finance intermediary who sold the loan to the consumer was able to determine or recommend the interest rate for the loan;
(c) the discretion to increase the interest rate from a base rate was not determined by objective criteria, such as the credit risk of the consumer;
(d) the commission payable to the motor dealer or finance broker intermediary was set by the ‘flex amount’, being the difference between the base rate and the contract rate. The larger flex amount the larger the commission. The bank also benefited from the commission because the “flex amount” would, in practice, be shared between the bank and its intermediary.

Royal Commission comment:

Flex commission arrangements were not disclosed to the consumer. The final report of the Banking Royal Commission said:

Many borrowers knew nothing of these arrangements. Lenders did not publicise them; dealers did not reveal them. The dealer’s interest in securing the highest rate possible is obvious. It was the consumer who bore the cost. To the borrower, the dealer might have appeared to be acting for the borrower by submitting a loan proposal on behalf of the borrower. The borrower was given no indication that in fact the dealer was looking after its own interests rather than acting as a mere conduit between lender and borrower. For all the borrower knew, the interest rate the dealer quoted had been fixed by the lender. But, whenever the dealer quoted a rate larger than the base rate, the dealer was acting in its own interests.

The effect of the practice was that consumers could be charged significantly different interest rates from the same intermediary, depending on their ability to negotiate that rate. For example, the same car dealer on the same day could set the interest rate at 6.5% for one consumer and 15.15% p.a. for another consumer even though they bought the same model of vehicle for similar value.

Contact the team

Call: 1800 318 063

Email: Flexclassaction@mauriceblackburn.com.au

We will endeavour to respond to your calls and emails as soon as we can and thank you for your patience and understanding.

Key documents

Case updates

The Westpac Car Loan Class Action and Esanda Car Loan Class Action are currently underway. The next step is known as ‘discovery’. The Macquarie Car Loan Class Action has been filed but not yet served.

 

Key dates

Registration is now open.

Contact the team

Call: 1800 318 063

Email: Flexclassaction@mauriceblackburn.com.au

We will endeavour to respond to your calls and emails as soon as we can and thank you for your patience and understanding.

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