ANZ New Zealand has suffered a major courtroom setback after the High Court found against the bank in a class action linked to historical home loan disclosure errors, exposing it to a potential bill of up to NZD $125 million.
The case relates to around 17,000 mortgage customers whose loan variation notices were affected by a system error between 30 May 2015 and 28 May 2016. Although ANZ has said the mistake meant many customers were undercharged by about $2 a month, the court found the issue was serious enough to trigger strict consequences under New Zealand’s consumer credit laws.
At the centre of the dispute is the Credit Contracts and Consumer Finance Act, known as the CCCFA. The law requires lenders to give borrowers clear, accurate and reliable information about their credit contracts, including repayment amounts and borrowing costs. In this case, the court found ANZ’s disclosure documents did not meet that standard.
The error came from one of ANZ’s lending systems, which failed to properly account for accrued interest that had built up but had not yet been charged. That meant some loan variation letters showed repayment figures that were wrong.
While the monthly difference may appear small, Justice Geoffrey Venning found the mistake could not be treated as a minor rounding problem. In one example, $801.82 of accrued interest had been left out of the calculation, affecting the repayment information given to borrowers.
Why the court decision is a major blow for ANZ
The size of the potential payout comes from the way the CCCFA operated at the time. Between 2015 and 2019, lenders that failed to comply with disclosure rules could lose the right to charge interest and fees for the period of non-compliance.
That is why a disclosure error, even one ANZ says left customers better off financially, has become a major legal and financial issue.
The High Court ruled that the representative borrowers were not liable for borrowing costs during the breach period and directed ANZ to refund them $32,728.42. ANZ is now assessing how the judgment may apply to the wider group of affected customers.
The bank estimates its maximum potential liability from the ruling at around NZD $125 million.
ANZ has argued that this outcome is disproportionate. Chief executive Antonia Watson said the bank was disappointed with the decision and maintained that the law was not intended to operate in the way argued by the plaintiffs and litigation funders.
The bank also said it had identified the issue itself, reported it to the Commerce Commission, and had already paid more than $35 million to affected customers. ANZ said those steps meant customers were left better off than they would have been if the error had never happened.
But the court focused on the legal importance of accurate disclosure. Borrowers rely on lenders to provide correct repayment details, especially when mortgage terms change. The judgment said customers were not in a position to calculate those figures themselves and needed the bank’s documents to be accurate.
The court also referred to evidence that inaccurate disclosure can reduce trust in the lending market. Even where a borrower is not clearly worse off dollar-for-dollar, incorrect loan information can still damage the quality of the financial product they received.
What this means for borrowers, banks and CCCFA cases
For affected ANZ customers, the ruling could mean further refunds if the judgment stands and applies across the class. ANZ has said it is considering its next steps, including whether to appeal.
The decision also adds pressure on banks to ensure old lending systems, disclosure templates and repayment calculations are fully compliant. A technical error in a loan platform can become a large-scale legal risk when it affects thousands of customers and sits inside a strict statutory framework.
The case is not happening in isolation. ASB previously agreed to pay $135.6 million to settle a similar class action involving disclosure breaches, showing how costly historical CCCFA problems can become for major lenders.
The ruling also lands during a wider debate about whether the law should give courts more flexibility in historical disclosure cases. The CCCFA was changed in 2019 for future breaches, and lawmakers have considered reforms that would allow courts to make orders that are more just and equitable for older cases that have not already been resolved.
For consumers, the judgment reinforces a simple point: banks must get loan disclosure documents right. Mortgage borrowers make long-term financial decisions based on repayment schedules, interest charges and contract changes. If those figures are wrong, the issue is not just technical — it can affect confidence, transparency and competition across the lending market.
For ANZ, the immediate question is whether it appeals. If the bank challenges the ruling, the case could continue to shape how New Zealand courts handle older CCCFA breaches. If it does not, the decision may move thousands of borrowers closer to additional payments linked to the bank’s historical disclosure failure.
More background on New Zealand’s consumer credit rules is available from the Commerce Commission’s borrowing and credit guidance.
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