Kiwibank is facing criminal charges filed by the Commerce Commission that allege systemic breaches of the Fair Trading Act that caused millions in overcharges.
The breaches relate to issues that resulted in more than $7 million being incorrectly charged to over 36,000 customers for fees and interest rates in relation to home loans, credit cards and overdrafts, over a period of several years.
In a statement on Tuesday, Commerce Commission deputy chair Anne Callinan said the serious charges stem from multiple errors in Kiwibank's manual and electronic systems, which resulted in the bank 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," Callinan said.
"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, with Callinan noting that the bank has been contacting customers and progressively refunding about $7 million in overcharges.
The Commission's charges relate specifically to the overcharges from 2019 onwards.
As this case is now before the Court, the Commission cannot comment further.
