1 Comment 1 Commentby Eric Frykberg
The issues arose in the lead up to tough new rules coming into force under the CCCFA on Dec 1 last year.
SBS admits this process could lead to some form of compensation for its customers.
An alternative could be some sort of enforcement action taken against SBS.
The details of what sparked this action have not been divulged. But a bare outline was provided in SBS's disclosure statement to the Stock Exchange.
“In preparation for the legislative changes associated with the Credit Contracts Legislation Amendment Act 2019 (CCCFA), SBS has self-reported some matters relating to CCCFA variation disclosure compliance pre 1 December 2021,” the statement read.
“This investigation is ongoing and the outcome is currently uncertain but could result in customer remediation or regulatory action.”
In a later statement, SBS management said that since the investigation was ongoing it could not provide any further information.
“We are working through these matters directly with the Commerce Commission.”
A statement from the Commerce Commission was equally terse.
“The Commerce Commission is investigating SBS’ compliance with the CCCFA,” it said.
“ As this investigation is ongoing, the Commission is unable to provide any further information at this stage.”
Two banking experts contacted by Good Returns stressed they had no personal knowledge of this instance, but thought this case might be an example of “over disclosure”.
According to this theory, the disclosure regime is so intensive that some banks err on the safe side by disclosing more than they usually would.
Earlier, SBS announced a six month profit of $17.96 million, a 24.8% drop on the same period a year ago, due to increased operating expenses and increased credit impairment charges.
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