Global search

Primary navigation

16 September 2020

Australia’s leading class action law firm Maurice Blackburn has today commenced a class action in the Victorian Supreme Court which alleges that Westpac Banking Corporation and St George Finance Limited colluded with car dealers to sting consumers with unfair high interest loans in Australia’s multi-billion dollar car finance industry.

The claim alleges that borrowers were not told that Westpac and St George had a cosy deal with car dealers that allowed the car dealers to hike up the interest rates on car loans from a “base rate” in order to earn substantial “flex commissions”.

In some cases, consumers were charged more than three times the base interest rate set by Westpac and St George.

In many cases, the higher interest rates were not determined by objective criteria such as credit risk, but were crudely used to boost the profits of car dealers and Westpac and St George.

The flex arrangements were a feature of the car industry for over 25 years before the practice was outlawed by ASIC in 2018 and condemned by the final report of Financial Services Royal Commission:

“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,” the final report said.

Maurice Blackburn’s National Head of Class Actions, Andrew Watson, said that hundreds of thousands of consumers were affected by the practice, unaware that the interest rate on their car loans was inflated by the dealership in return for undisclosed kick-backs.

“The expectations of consumers was that the dealer was a conduit for, but was not setting, the interest rate. It is safe to assume that most consumers understood that the roles of car dealers and lenders were distinct,” Mr Watson said

In fact Westpac and St George had set up an arrangement which rewarded the car dealers for gouging their customers.

“This case will seek to prove that Westpac and St George failed to comply with their obligations under consumer credit protection laws and that this failure caused substantial losses for many consumers.”

Mr Watson said in some cases consumers were slugged with interest rates that were more than 10 per cent above the underlying base rate offered by the bank.

In many cases, consumers were not told of the loan’s interest rate until after they agreed to purchase the car.

Based on ASIC statistics, it appears that there are approximately 400,000 class members, many of who should be compensated for the overcharging by Westpac and St George.

One of the lead applicants, Alannah Fox, was charged 12.99 per cent on a loan of just over $47,323 meaning she was forced to pay a whopping $24,864 in interest for a 2015 Hyundai ix35.

Ms Fox was a 25-year-old teachers’ aide when she bought the car and was only told of the interest rate after she agreed to the purchase.

“They didn’t tell me the interest rate until I went to pick up the car. We bargained hard on the initial price, but I believe they knew what they were doing and slugged me with the high interest rate to compensate,” Ms Fox said.

“Banks and car dealerships ripped-off so many unsuspecting car buyers. I feel they targeted me because I was young and eager to get in to my first new car. My advice to other car buyers is shop around and make them explain to you exactly how the loan works and where the money is going.”

Those with Westpac and St George car loans from 1 March 2013 to 31 October 2018 can register for the class action online at:


Media inquiries: 

Paddy Murphy at Maurice Blackburn on 03 8102 2003 / 0490 297 391 or via


Practice Areas:
Class actions


Maurice Blackburn media team

Our media team advises and supports Maurice Blackburn lawyers and clients during all forms of media engagement, including video and television appearances, radio, online and print media.

Please direct media inquiries to, or contact team members directly via the phone numbers below.


Jade Knight

National Manager Public Affairs, Media and communications

  • Brisbane, QLD
  • (07) 3016 0396
    0417 969 438

Michael Cooney

General Manager Public Affairs, Media and communications

  • Melbourne, VIC
  • (03) 9605 2700

Chee Chee Leung

Media Manager, Media and communications

  • Melbourne, VIC
  • (03) 9045 6941
    0412 560 584

Paddy Murphy

Media Manager, Media and communications

  • Melbourne, VIC
  • (03) 8102 2003
    0490 297 391

It doesn't cost you anything to know where you stand 

Office locations

We’re here to help. Get in touch with your local office.

Select your state below

We have lawyers who specialise in a range of legal claims who travel to Australian Capital Territory. If you need a lawyer in Canberra or elsewhere in Australian Capital Territory, please call us on 1800 675 346.

We have lawyers who specialise in a range of legal claims who travel to Tasmania. If you need a lawyer in Hobart, Launceston or elsewhere in Tasmania, please call us on 1800 675 346.