In one of the most significant consumer finance settlements of recent years, Westpac Banking Corporation and its affiliated institutions have agreed to pay out approximately AUD $130 million (USD $81 million) following a class action lawsuit. This case, brought forward by Maurice Blackburn Lawyers, addresses alleged misconduct in the handling of auto loans issued between March 2013 and October 2018. The loans in question were facilitated by Westpac, St George Finance, BankSA, and Bank of Melbourne through dealerships that used a now-banned “flex commission” model.
Under this model, car dealers were permitted to inflate the interest rate on a customer’s loan to increase their commission payments, without informing the borrower. The practice, deemed unfair and exploitative, led to higher loan costs for thousands of Australian consumers. Following legal proceedings and heightened scrutiny in the aftermath of Australia’s Royal Commission into banking misconduct, Westpac has agreed to a financial resolution that could benefit a wide pool of affected borrowers.
Legal Allegations and Institutional Accountability
The lawsuit centers on the use of “flex commissions,” a system under which car dealerships had discretion over the interest rates assigned to auto loans. Customers believed their interest rates were solely determined by the banks, when in reality, dealerships often added margin to increase their commissions. This hidden mechanism could add hundreds or even thousands of dollars to a borrower’s total loan repayment.
While Westpac has not admitted to any wrongdoing as part of the settlement, its agreement to pay $130 million is seen as a step toward industry-wide accountability. The Australian Securities and Investments Commission (ASIC) formally prohibited flex commissions in 2018, concluding they fostered conflicts of interest and breached consumer trust.
Eligibility Conditions for Consumers Affected
Not every Westpac auto loan customer is eligible, but a significant number of individuals may qualify if their loans fall within the specified timeframe and were structured using the flex commission arrangement. You may qualify even if the loan has been paid off, or if documentation is missing.
| Criteria | Condition |
|---|---|
| Loan Type | Consumer car loans arranged through a dealership |
| Issuing Institutions | Westpac, St George, BankSA, Bank of Melbourne |
| Loan Period | Between 1 March 2013 and 31 October 2018 |
| Loan Terms | Involved a flex commission to the dealer |
| Current Loan Status | Can be paid off or still active |
| Documentation | Not mandatory, but helpful |
Those uncertain about whether their dealership or loan was part of the flex commission model can still register. Additional verification will be handled during the claims assessment phase. Maurice Blackburn encourages all potentially affected individuals to submit their details to ensure their eligibility is evaluated.
What to Expect from the Registration Process
Registration is free and relatively simple. The process is designed to collect essential information about your loan and confirm if it falls within the parameters of the class action. While registering does not guarantee a payout, it does ensure your participation in the court-ordered review.
- Visit the official registration website (URL to be provided by Maurice Blackburn).
- Enter your full name, current contact details, and information about your vehicle loan.
- Include, if available, documentation such as dealership name, vehicle model, loan dates, or payment records.
- Submit the completed form and retain any confirmation ID provided.
- For assistance, you may call the support line at 1800 318 063.
You do not need to provide original loan contracts or car ownership documents. Even if you no longer own the vehicle or have moved interstate, your application remains valid if the loan meets the settlement conditions.
Court Approval and Implementation Timeline
As of 2025, the court has given preliminary approval to the settlement; however, full implementation will proceed only after final confirmation. Once approved, the claims administration will enter several phases: claim validation, compensation calculation, and fund distribution. Each applicant’s payout will be determined based on how much additional interest they paid because of the dealer-imposed markup.
| Phase | Details |
|---|---|
| Court Final Approval | Expected mid-2025; authorizes implementation of the settlement scheme |
| Claims Review | Evaluation of registered claims to determine eligibility and overpayment |
| Payout Calculations | Compensation determined by loan size, term, interest markup, and duration |
| Distribution Phase | Payments transferred to eligible customers via bank or cheque |
This structured process ensures fair compensation and compliance with the terms agreed upon by Westpac and the class action representatives. A third-party administrator may be appointed to manage the funds impartially under court supervision.
Factors Influencing Individual Compensation Amounts
The exact payout each claimant receives will differ depending on their unique loan situation. Some borrowers may have experienced minor rate increases, while others paid significantly more over time due to elevated interest charges. The total amount recovered per person may range from a few hundred dollars to several thousand, depending on these contributing elements.
- Original amount borrowed through the dealership loan
- Length of loan repayment period
- Interest rate markup applied by the dealership
- Total amount of interest overpaid compared to base rate
- Whether the loan was refinanced or repaid early
Claims administrators will use this data to calculate each person’s portion of the $130 million pool. Importantly, the use of available records and bank data will help approximate interest charges even if claimants lack full documentation.
Helpful Checklist for Potential Claimants
Before you begin the registration process, consider compiling the following details. While not mandatory, these can streamline the verification process and increase the accuracy of your claim.
- Name of the car dealership where you secured financing
- Make, model, and year of the car
- Approximate date of the loan agreement
- Any old bank statements showing car loan payments
- Email or physical letters from your lender during the loan term
Additionally, stay updated with communication from Maurice Blackburn or the official settlement page, where timelines and FAQs will be regularly updated.
Take Prompt Action if You’re Eligible
The Westpac car loan class action has resulted in a rare and substantial financial opportunity for affected Australian borrowers. With over $130 million allocated for compensation, this settlement aims to restore fairness to customers who were unknowingly subjected to inflated loan terms due to industry-driven incentives.
While the process is still in motion and final court approval is pending, eligible individuals are strongly encouraged to register their interest now. Doing so preserves your right to claim your portion of the fund and holds financial institutions accountable for practices that have long gone unchallenged.
If you suspect your loan may qualify, even if you are unsure of the detail,s it is better to register and allow the administrators to determine your eligibility than to miss out entirely.