Bank faces criminal charges

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

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

Anne Callinan, the commission’s deputy chair, says the charges stem from multiple errors in Kiwibank’s manual and electronic systems, which resulted in it 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,” she adds.

“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. Callinan, pictured, notes the company has been contacting customers and is progressively refunding about $7m in overcharges.

The criminal charges relate specifically to overcharges from 2019 onwards and as this case is now before the court, the commission says it cannot comment further.