Wednesday, June 19, 2024

Kiwibank face criminal charges over $7m in overcharges

The Commerce Commission has filed criminal charges against Kiwibank Limited (Kiwibank), alleging systemic breaches of the Fair Trading Act.

It says the breaches relate to issues that resulted in more than $7 million being incorrectly charged to over 36,000 customers for fees and interest rates in relation to home loans, credit cards and overdrafts, over a period of several years.

Commerce Commission Deputy Chair, Anne Callinan said the serious charges stem from multiple errors in Kiwibank’s manual and electronic systems which resulted in Kiwibank misrepresenting what customers owed.

“In the Commission’s view these are longstanding, systemic breaches of the Fair Trading Act some of which date back to Kiwibank’s inception in 2002,” Ms Callinan says.

“Lenders must have processes in place to ensure consumers are getting a fair deal and are charged what was advertised to them.

“The Commission expects banks to make the necessary investment in the systems that support their compliance obligations so they get things right for consumers.”

The issues were first identified by Kiwibank and reported to the Commission. Ms Callinan says Kiwibank has been contacting customers and is progressively refunding about $7 million in overcharges.

The Commission’s charges relate specifically to the overcharges from 2019 onwards.

As this case is now before the Court, the Commission cannot comment further, said Ms Callinan.

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