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Update about the class actions (January 2024)

  • What was the outcome of the mediation? 

    In December 2023 court ordered mediations were held in each of the class actions. Unfortunately, the parties were not able to reach agreement to settle the cases. As a result, we will be going to Court at the first available opportunity to seek a trial date for the cases this year. 

  • What does this mean? 

    Because the class actions did not settle at mediation, the claims of group members who did not register before the respective deadline will now be determined in the case and those group members will be bound by the result and entitled to seek to benefit from any judgment delivered for the plaintiffs, along with those group members who did register their claims. This means that:

    • If you registered before the deadline, you are still considered part of the class action and may be eligible for compensation if the case settles at a mediation in the future or if it is successful at trial. There is nothing further you need to do at this stage.  
    • If you ‘recorded your interest’ in the class action after the respective deadline, you  may now be eligible for compensation if the case settles at a mediation in the future or if it is successful at trial. There is nothing further you need to do at this stage. 
    • If you have not yet registered your interest with us and think you might be eligible, it is not too late. See further details on eligibility and how to register your interest, below. 

If you have not yet registered, we encourage you to do so if you had a consumer car loan arranged through a dealer with:

  • ANZ (‘Esanda’) between 1 January 2011 and 31 March 2016;
  • Macquarie Leasing between 1 March 2013 and 31 October 2018; and/or
  • Westpac & St George between 1 March 2013 and 31 October 2018. 

It does not cost you anything to register your interest and you will never be asked to pay any costs out of your own pocket. 

If you have already registered or recorded your interest, there is nothing further you need to do. We will be in contact with any key updates in the class action as they arise.

More information can be found in the FAQ section of this page.

About the Class Actions

The Flex Commission class actions are three class actions about the ‘flex commissions’ paid to car dealers by Westpac Banking Corporation and St George Finance, Australia and New Zealand Banking Group Limited (Esanda), and Macquarie Leasing Pty Ltd in relation to consumer car loans.

Flex commission arrangements allowed car dealers to set the interest rate and loan term on car loans. The higher the interest rate and the longer the loan term, the greater the commission received by the dealer. These arrangements were banned by ASIC on 1 November 2018 and a subject of inquiry at the Financial Services Royal Commission.

The plaintiffs, on behalf of group members in these class actions, allege that flex commissions were unfair and unlawful and resulted in consumers paying higher interest rates on their car loans than they otherwise would have. As a result, they are claiming compensation and other relief for those who have been affected.

You can find more information about the flex commission arrangements and eligibility criteria in the FAQs below.

Frequently asked questions about the Flex Commission Class Actions

Eligibility criteria 

You are a group member if you had a consumer car loan arranged through a dealer on which a flex commission was paid with:

  • ANZ (‘Esanda’) between 1 January 2011 and 31 March 2016;
  • Macquarie Leasing between 1 March 2013 and 31 October 2018; and/or
  • Westpac & St George between 1 March 2013 and 31 October 2018.

Over 1 million Australians are potentially eligible for these class actions. Flex commissions were paid in relation to most, if not all, consumer car loans during these time periods.

PLEASE NOTE:

  • Car loans that started with Esanda and then were transferred to Macquarie in 2016 are part of the ANZ (Esanda) Car Loan Class Action. 
  • Car Loans with Bank of Melbourne or BankSA were arranged under Westpac or St George’s credit licence.
  • It does not matter whether or not you have paid off the car loan and whether or not you still have the car you paid for with the car loan.
  • This class action covers car loans on new and used vehicles.
  • This class action only covers consumer car loans arranged through car dealers. It does not cover loans arranged directly with the banks, novated leases, business loans or goods loans.


However, you may register your interest with us to be notified of any updates in these class actions. Please note that recording your interest does not guarantee that you will be able to receive compensation. However, it means we will be able to get in contact with you:

(a)  If the Court decides to make further orders permitting people who did not register before the deadline to be eligible for potential compensation arising from the upcoming mediation; or
(b)   If the upcoming mediation fails – in which case, you may be entitled to compensation after a successful trial before the Court or if the class action settles at another mediation in the future.

Please note:

  • Car loans that started with Esanda and then were transferred to Macquarie in 2016 are part of the ANZ (Esanda) Car Loan Class Action. 
  • Car Loans with Bank of Melbourne or BankSA were arranged under Westpac or St George’s credit licence.
  • It does not matter whether or not you have paid off the car loan and whether or not you still have the car you paid for with the car loan.
  • This class action covers car loans on new and used vehicles.
  • This class action only covers consumer car loans arranged through car dealers. It does not cover loans arranged directly with the banks, novated leases, business loans or goods loans.

It does not cost you anything to record your interest and you will never be asked to pay any costs out of your own pocket.

The Supreme Court of Victoria has made a group costs order in each of the three proceedings. This means that if the class action in which you are a group member is successful (by judgment or settlement), any legal costs payable to Maurice Blackburn has been set as 24.5% of the total monetary amount achieved at mediation or awarded by the Court. It does not come out of group members’ own pockets.

The Court will also need to approve any amount paid to Maurice Blackburn for the work that they have done as fair and reasonable.

The Court may change the rate of the Group Costs Order in the future, for example, if it would result in Maurice Blackburn being paid an excessive amount of money for the work they have performed.

Maurice Blackburn will bear the costs if the class action is unsuccessful.

A flex commission is a payment made by a lender to a car dealer depending on the interest rate and length of a car loan that the dealer arranged for the lender with a consumer. The flex commission increased as the interest rate and/or term of the car loan increased.

In general, the more a consumer paid in interest, the higher the flex commission would be.

The plaintiffs allege that this arrangement incentivised car dealers to increase the interest rate and/or the length of car loans, in order to increase their flex commission, and consequently, consumers paid more than they otherwise would have.

How did it work?

When a consumer bought a car and arranged their car finance through a car dealership, the car dealer set the rate of interest on a car loan at or above a base rate and below any cap set by the lender.

The car dealer had discretion to increase or decrease the interest rate without reference to the risk profile of the car loan or consumer. The lenders also benefited from the commission because the “flex amount” was shared between the bank and the car dealer.

The plaintiffs claim that consumers were not told or informed of the existence of the Flex Commission, how it was calculated, or the amount paid in relation to their car loan when they should have been.

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.

Financial Services Royal Commission Final Report 2018

The plaintiffs say flex commissions were unlawful because they are in breach of legislation prohibiting “unfair or dishonest conduct” and “misleading and deceptive conduct”.

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.

Financial Services Royal Commission Final Report, 2018

The plaintiffs also claim that interest paid on the car loans was “money had and unjustly received” and caused “unjust enrichment” of the defendants.

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.

The plaintiffs allege that 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.

Flex Commissions were banned by ASIC from 1 November 2018.

If you want to know more about the claims, you can read the pleadings for each case on the Supreme Court of Victoria website here.

You can also read more about flex commission arrangements in the ASIC Report “Flex commission arrangements in the car finance market” dated March 2017 here.

We are unable at this time to inform every group member of how much compensation they may receive. This depends on a number of factors, including:

  • the terms of your loan contract including the interest rate charged; and
  • the terms of any settlement reached or judgment made in relation to the claims

If you still have questions, please call Maurice Blackburn on 1800 318 063, or email us on the appropriate email address below: 

We are experiencing a high volume of enquiries so may not get back to you straight away.

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We are the only Australian class actions firm to deliver $100m+ settlements to clients in shareholder and listed securities actions, which we have done on ten occasions.  

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