Kiwibank is to pay $5.2 million to 48,000 home loan customers after it admitted its systems and disclosure policies were inadequate.
In a settlement reached with the Commerce Commission, the state-owned bank admitted that it did not act with diligence and standard of care expected of a responsible lender.
The chair of the Commission Anna Rawlings said Kiwibank failed to comply with the standards required under the Credit Contracts and Consumer Finance Act.
"While Kiwibank had policies in place for disclosing more complex changes, its system and process failures affected the information it provided to some customers when they made simple changes, such as re-fixing interest rates or changing repayment amounts."
Kiwibank reported to the Commission in August last year that it failed to have in place robust home loan variation disclosure policies, procedures and systems for certain types of home loan variations in the period before April 2019.
Rawlinson said affected customers eligible for repayments would be contacted directly by Kiwibank.
Kiwibank chief executive Steve Jurkovich said it had identified the issue and reported it to the Commerce Commission, and had worked constructively since then to resolve it.
"We apologise to customers and would like to reassure them that our systems and processes have been improved to ensure we deliver good customer outcomes."
RNZ
