Australia's Westpac Banking Corp announced on Friday that it has reached a A$130 million ($81.84 million) settlement regarding a class action lawsuit filed against the lender for commissions paid to auto dealers over a period of five years. The lawsuit alleged that Westpac and St George Finance allowed car dealers to increase interest rates on car loans to receive these commissions between March 1, 2013, and October 31, 2018.

The settlement, subject to court approval, signifies the conclusion of the final litigation stemming from the Royal Commission for Westpac. The bank stated that it ceased offering such flex commissions in 2018 and halted new lending through its auto finance division in 2022. The settlement amount was noted to have been "largely provided for as at December 31, 2024 and included in Westpac's 1Q25 update."

In a similar vein, ANZ, another leading lender, paid A$85 million in October to settle claims related to car loans issued under its credit license between 2011 and 2016. The claimants in this case alleged that "flex commissions" were being paid to car dealers accredited by ANZ.

($1 = 1.5886 Australian dollars)