19 May 2015

Farmers can challenge swaps offer, says CC

10:31 am on 19 May 2015

The Commerce Commission says farmers can challenge their bank's compensation offer in regards to interest rate loan swaps.

Angela Potroz

Angela Potroz Photo: RNZ / Jemma Brackebush

Following an investigation, the commission reached an agreement with ANZ, Westpac and ASB in relation to the marketing, promotion and sale of interest rate swaps to rural customers between 2005 and 2009. The commission received more than 250 complaints as part of its investigation.

Farmers are starting to receive compensation offers and are deciding what their next step will be.

The Commerce Commission said farmers could challenge the offers if they believed the offer does not reflect the facts of their loan swap agreements.

A number of farmers have told Radio New Zealand they are awaiting imminent compensation offers from their bank before deciding whether to accept it or fight it.

One farmer, Angela Potroz, had to sell three family farms when her interest rate swaps loan went sour.

She received an offer of compensation of $78, 417 from ANZ, which it will deduct from her outstanding debt.

ANZ bank logo.

Photo: RNZ

She is calling on farmers who are not happy with their offers to join her in a class action lawsuit against the banks.

In a statement, ANZ said the agreement with the Commerce Commission allowed compensation payments to be offset against money owed to or written off by the bank.

ANZ said swaps were a legitimate product for farmers, and farmers continued to request them.

The lawyer representing Ms Potroz said farmers wanting to take a class action lawsuit faced two main hurdles.

Victoria Whitfield said one was making sure a group of farmers could decide on a common interest.

The other was that some of the claims may be too old to bring before the court.

"Obviously in New Zealand we have legislation that prevents stale claims from being brought out of time, and the relevant periods in this case are likely to be three years and six years, and I suspect some of the claims are going to be out of time."

Ms Whitfield said farmers thinking about taking legal action should talk to their lawyers sooner rather than later.

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