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Westpac Resolves Auto Finance Class Action with $81 Million Settlement
Addressing Past Lending Practices in Australia's Car Loan Sector
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The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Australia's Westpac Banking Corporation has reached a settlement of A$130 million (approximately $81.84 million) to resolve a class action lawsuit concerning its auto finance practices.
The lawsuit, initiated by law firm Maurice Blackburn in 2020, alleged that between March 1, 2013, and October 31, 2018, Westpac and its subsidiary, St George Finance, permitted car dealers to increase interest rates on car loans to earn higher commissions.
This settlement, pending court approval, marks the conclusion of litigation related to the Royal Commission for Westpac. The bank ceased paying such 'flex commissions' in 2018 and stopped new lending through its auto finance business in 2022. The settlement amount was largely accounted for in Westpac's financial update for the first quarter of 2025.
Similarly, in October 2024, ANZ Bank settled a related class action for A$85 million over car loans issued between 2011 and 2016. These settlements highlight the ongoing scrutiny and legal challenges faced by major Australian banks regarding their past lending practices.
For consumers, these developments underscore the importance of transparency and fairness in car financing. Borrowers are encouraged to thoroughly review loan terms and seek clarity on any commissions or fees associated with their loans. Additionally, staying informed about regulatory changes and legal actions in the financial sector can help consumers make more informed decisions when financing vehicle purchases.
Published:Saturday, 1st Nov 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
The Australian Securities and Investments Commission (ASIC) has issued a warning to the public regarding a surge in scams where fraudsters impersonate the commission. These scammers are contacting individuals via emails and text messages, falsely claiming that a payment is required to release funds or assets. - read more
Loan Market Group's (LMG) Asset Finance Exchange (AFX) has reported an impressive $80 million in settlements during its first year of operation, underscoring the rapid growth and significance of the asset finance sector in Australia. This achievement highlights the increasing reliance on asset finance solutions by businesses and individuals seeking flexible funding options. - read more
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