July 16, 2020 / 11:01 PM / 25 days ago

Australia's Westpac hit with class action over car loan commissions

FILE PHOTO: Pedestrians walk past the ground floor of an office building with Westpac logo amidst the easing of the coronavirus disease (COVID-19) restrictions in the Central Business District of Sydney, Australia, June 3, 2020. REUTERS/Loren Elliott

(Reuters) - Westpac Banking Corp (WBC.AX) said on Friday it has been served with a class action over commissions paid to auto dealers between 2013 and 2018 that are alleged to have led to higher interest rates for car loans.

The “flex commissions” have been banned in Australia since 2018.

The class action, filed by law firm Maurice Blackburn, claims Westpac and St George Finance Ltd let car dealers hike rates on car loans to earn these commissions from March 1, 2013, to Oct. 31, 2018.

Consumers in some cases were charged more than three times the set base interest rate, Maurice Blackburn said in a statement.

Australia’s second-biggest bank said the damages amount sought was unspecified and it will defend itself against the claim.

The bank acknowledged that other similar claims may be filed.

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Leslie Adler

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