9 April 2025
The Government’s proposed amendment to
the Credit Contracts and Consumer Finance Act (CCCFA) has
been criticised as explicitly discriminatory legislation
benefiting major Australian-owned banks at the expense of
New Zealand consumers.
Banking Class Action lawyer,
Scott Russell, says:
“This amendment represents
unprecedented political interference with the judicial
process, specifically targeting an ongoing class action
which was filed four years ago against ANZ and ASB by
effectively changing the rules
mid-litigation.”
“This proposed amendment is a
direct attack on the rights of everyday New Zealanders,”
Russell continues. “It’s highly unusual for the
Government to seek a fundamental change to consumer
protection laws that favours powerful Australian-owned banks
while they’re in the middle of legal
proceedings.”
The amendment undermines
confidence in the rule of law and therefore, confidence in
everyday commerce and international investment. It harms New
Zealand’s reputation and unfairly denies the plaintiffs
their claims, for no other reason other than to effectively
transfer wealth to Australian owned
banks
The class action, filed in 2021,
follows admissions by the banks that they failed to comply
with CCCFA disclosure requirements following a Commerce
Commission investigation. Thousands of affected borrowers
are currently entitled to refunds of interest and fees under
existing law. The case has already secured class
certification and is awaiting summary
judgment.
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“Consumer protection laws are
critically important to discipline on the behaviour of large
corporates, particularly where they have dominant market
positions,” says Russell. “Passing retrospective
legislation like this makes New Zealand look weak and shows
the Government is prepared to bow to corporate interests
rather than protecting ordinary New
Zealanders.”
If passed, the amendment would
retrospectively alter penalties for breaching the law,
giving judges broad discretion to reduce or deny
compensation that consumers are currently entitled to
receive.
“The banks themselves have admitted this
case poses no material risk to them, yet they’ve clearly
lobbied successfully behind closed doors for legislation
that could deny hundreds of thousands of Kiwis their
rightful compensation,” says
Russell.
“Retrospective legislation is universally
recognised as offensive to the rule of law except in
extraordinary circumstances. This amendment violates legal
certainty and creates a dangerous precedent for future
governments to retroactively nullify consumers’ rights
without justification.”
There are no other known
active cases that would be affected by the proposed change.
Russell says:
“This is clearly a targeted
intervention to amend the law to benefit two powerful
Australian-owned banks at the expense of thousands of
everyday New Zealand consumers. It contravenes all
established norms and upends the right to a level playing
field when pursuing claims through the justice
system.”
The amendment also contradicts earlier
Government assurances. In September 2024, then-Minister
Andrew Bayly stated that retrospective changes were not
being considered. Bayly subsequently left Parliament on 21
February 2025, and the 5 March 2025 Regulatory Impact
Statement issued under the new Minister confirmed that
retrospective provisions had since been included — with no
clear justification and no adequate
consultation.
“The amendment undermines the
constitutional principle that all are equal before the law
and sets a dangerous precedent by allowing powerful
corporate interests to circumvent legal accountability
through legislative intervention.”
“This is
about taking money out of the pockets of New Zealand
families and putting it into the hands of Australian-owned
banks, their executive bonus pools, and shareholders,”
Russell states.
“Separating Parliament from our
courts is fundamental to our democracy. This amendment
crosses that
line.”
