ASB repays $9m over break-fee blunder
ASB has been censured by the Commerce Commission after over-charging break-fees to home loan customers.
Thursday, June 17th 2021, 12:35PM
The big four bank has agreed to pay nearly $9 million to affected customers who broke fixed term loans between April 2005 and December 2016.
Over 48,000 early repayment fees were overcharged for borrowers who had terminated fixed rate term loans over the period. About 11,000 customers were undercharged.
Many of the blunders affected home loans, while a small amount were business loans, asset finance, commercial, personal and rural loans.
The Commission warned ASB it had likely broken lending laws by failing to act with the "care, diligence, and skill of a responsible lender. It may have also broken the Fair Trading Act by making misleading statements over its right to charge fees."
ASB has taken steps to assure the regulator that it has addressed the issue, and taken steps to compensate borrowers. The bank has repaid a significant portion of the $8.9 million.
Anna Rawlings, chair of the Commerce Commission (pictured) said: "Lenders must implement robust systems and processes to help them to comply with their legal obligations. Those processes should include adequate checks to identify and rectify failures quickly if they arise.
"ASB identified these matters itself and reported them to the Commission. It developed a plan for compensating borrowers and it has begun making refund payments to affected customers. It has waived any claim in relation to undercharged ERA fees. ASB has also made process changes to ensure the problem does not reoccur."
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