The law firm, Phi Finney McDonald, filed a class-action suit in the federal court against Australia's No. 4 lender for charging interest between July 2010 and January 2019 on purchases that should have been interest-free.
"The terms of ANZ's contract made it impossible for a typical consumer to understand that they would be charged retrospective interest, even on purchases which they repaid on time," the law firm said in a statement.
Australia outlawed charging retrospective interest in January 2019.
The lawsuit alleged "unfair contract terms and unconscionable conduct" by the bank, but did not specify the damages it was seeking against ANZ in the federal court.
ANZ said in a statement it would review the claim that its contract contravened the Australian Securities and Investments Commission Act.
The lawsuit is the latest in a string of legal actions faced by Australia's top banks, ranging from breach of consumer protection credit laws to charging financial advice fees to dead customers.
Scrutiny of Australian lenders and financial institutions has ramped up significantly since a Royal Commission inquiry in 2018 found widespread shortcomings in the sector, forcing companies and regulators to take swift action.
(Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur)