Westpac Concludes Auto Loan Commission Lawsuit with $81 Million Settlement

The class action, initiated by law firm Maurice Blackburn in 2020, claimed that such 'flex commissions' led to consumers paying more for their car loans than they might have otherwise. These commissions allowed dealers to adjust interest rates, often resulting in higher costs for borrowers. Westpac ceased paying these commissions in 2018 and discontinued new lending through its auto finance business in 2022.

This settlement signifies the conclusion of Westpac's legal proceedings related to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The bank stated that the settlement amount was largely accounted for in its financial update as of December 31, 2024.

Similarly, in October 2024, ANZ Banking Group settled a related class action for A$85 million over car loans issued between 2011 and 2016, highlighting a broader industry shift away from such commission structures.

For consumers and businesses seeking truck financing, these developments underscore the importance of transparency in loan agreements. It's crucial to understand all terms and conditions, including how interest rates are determined and whether any commissions are involved. Engaging with reputable lenders who prioritise clear and fair lending practices can help ensure that borrowers secure financing that aligns with their financial goals without unexpected costs.