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Major mortgage class action dropped

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Annie Kane 3 minute read

A class action lawsuit that was being planned on behalf of “Australian bank customers that have entered into mortgage finance agreements with banks since 2012” has been dropped due to a lack of a “clear cause of action”.

Law firm Chamberlains has announced that its major class action against various Australian banks will no longer proceed despite interest in the matter.

In May of this year, it was announced that law firm Chamberlains had been appointed to act in the planned class action lawsuit, which was instructed by Roger Donald Brown of MortgageDeception.com to represent various Australian bank customers that had been “incurring financial losses as a result of entering into mortgage loan contracts with banks since 2012”.

The law firm had been calling on bank customers to join the class action, led by Stipe Vuleta, if they had “incurred financial losses due to irresponsible lending practices”.

In an update to interested parties, seen by The Adviser, Chamberlains commented: “Over the last few months, we have been busy investigating the scope of a potential legal claim, which could be commenced as a class action against various Australian banks.

“During this process, we have engaged with senior and junior counsel to assist with the questions of law to be raised if an action were to be commenced in the Federal Court of Australia.

“Despite our efforts, we have been unable to identify a clear class of claimants who have a clear cause of action against a particular Australian bank.”

It continued: “As a result, we are unable to take this process further.”

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While the law firm has said that some may still have “an individual case arising from [their] dealings with the banks, which may have merit outside of the framework of a class action”, it would encourage those people to “seek independent legal advice about [their] claim”.

Class actions in focus

Several class actions against major lenders have already been initiated following some of the revelations from the royal commission, including four separate class actions against AMP on the grounds that the company breached its obligations to customers and engaged in “misleading and deceptive representations to the market”.

The legal action was announced after senior AMP executives appeared before the royal commission as witnesses. Some of the executives admitted to a number of potential crimes and suggested that these were repeatedly mischaracterised to the Australian Securities and Investments Commission (ASIC) and to its customers as being “administrative errors”.

These included providing false and misleading statements to the regulator and charging customers for services that were not provided.

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The ASX-listed lender, which announced the immediate resignation of its CEO and apologised “unreservedly for the misconduct and failures in regulatory disclosures” earlier this year, has lost more than $1 billion in shareholder value since March and could potentially face criminal charges.

[Related: Mortgage industry could face massive class action]

 

Major mortgage class action dropped
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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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