Over 170,000 borrowers sue ANZ, ASB banks over interest mistakes

Up to 174,000 borrowers are suing two of the country's biggest banks, who they claim wrongfully profited off their mortgages.

A class action lawsuit was filed against ASB and ANZ bank at 4pm on Wednesday afternoon, with borrowers vying for a possible multi-million dollar payout.

The suit alleges that because customers were given incorrect information about their home loan repayments, the banks should not have charged them any interest and must repay it.

"This is about accountability and fairness," the plaintiff's lead solicitor Scott Russell told Newshub. 

"All we're asking is that the banks comply with their legal obligations and refund their customers the money they are due to be refunded."

Both banks have already admitted they broke responsible lending law when they gave customers incorrect information about the amount of interest they had to pay on their loans when they refinanced. ANZ made mistakes for a year, while ASB made errors for a period of four years.

In settlements with the Commerce Commission, both banks agreed to compensate millions of dollars to customers affected, however it was not the full amount of interest customers paid.

ASB customer Anthony Simons got a $135 compensation credit, but could be entitled to a $22,000 interest refund from his $550,000 mortgage. 

"It's nothing to do with the money," he said. "It's about the trust. I just trust that the bank is going to do what they do and do the right thing, and they just haven't."

If every customer was found to be owed an average $10,000 each, it would cost the banks $1.7 billion. 

Another ASB customer and plaintiff, Bruno Bickerdale, who did not know how much interest he was claiming, said he was taking action to ensure banks did not do this again. 

"Do better [ASB]. Look after your customers." 

ASB told Newshub it would not comment because the case was before the Auckland High Court. 

In a written statement, ANZ said it would defend the claim, which related to historic issues. 

"More than $35 million has been paid to customers. ANZ considers we have fairly remediated our customers."