ASB to repay millions
ASB Bank Ltd has agreed to repay $8.1 million to customers who may have been affected by a breach of its lender responsibilities under the Credit Contracts and Consumer Finance Act (CCCFA).
The move follows the bank entering into a settlement with the Commerce Commission.
It has admitted to failing to ensure its systems and processes were sufficient for required information to be given to more than 73,000 home and personal loan customers who made changes to their lending.
The self-reported error occurred when the bank’s standard operating procedure was inconsistently followed for people altering the relevant repayment date, and the amount and frequency of existing agreements in branch or over the phone.
This meant some customers may not have been given information about these changes when variation disclosure was required by the CCCFA.
“Lenders must exercise the care, diligence and skill of a responsible lender in all dealings with borrowers,” says commission chairwoman Anna Rawlings.
“In this case, ASB’s responsible-lending failures had the potential to affect a large number of borrowers entitled to receive key information when they made changes to their loans, including information about how the change impacted their overall obligations.
“Lenders need not only to make sure they understand their obligations under the CCCFA, but also that they have robust internal processes to meet those obligations.”