Case revolves around home loan fee waivers
Kiwibank has released a statement in response to the Financial Markets Authority’s (FMA) decision to take the bank to court over home loan fee waivers.
Last week, the FMA said it will take Kiwibank to court on charges of making false and/or misleading statements under the fair dealing provisions of the Financial Markets Conduct Act (FMC Act)
Kiwibank’s general terms and conditions reportedly indicated that customers will not pay transaction fees on their accounts if they also had a home loan from the bank.
However, the FMA claims that between September 01, 2005, and March 31, 2020, 35,000 of Kiwibank’s home loan customers did not have fee waivers applied to their accounts and were overcharged a total of $1,172,639.94.
As the FMC Act came into force from April 01, 2014, the regulator’s proceedings can only cover conduct from that date onwards, capturing 19,000 of the affected customers and overcharged fees totalling $576,809.66.
In response, Kiwibank offered assurances that it continues to take any issues impacting its customers seriously, which is why it proactively seeks out and investigates issues where, like in the recent case, manual processes have led to errors.
“We are sorry for the impact this issue has had on our customers. We remain committed to finding any such issues and making them right,” the bank said in a statement.
Read more: FMA takes Kiwibank to court over home loan fee waivers
In June 2018, the FMA and the Reserve Bank of New Zealand (RBNZ) commenced their joint conduct and culture review of NZ-registered banks, which were asked to provide details of any work underway to remediate any identified issues where bank conduct has resulted in detrimental outcomes for customers.
After the publication of the joint review’s findings, the FMA continued to ask banks to inspect their systems for issues, leading Kiwibank to identify the affected customers in or around August 2019. As a result, the bank advised its board of the issue in October 2019 and reported it to the FMA shortly after.
“Kiwibank discovered the issue in August 2019 and quickly fixed the problem. We’ve apologised to our customers for the error and fully refunded those fees and any interest they would have earned on that money. Kiwibank customers who have any questions about this issue can find more information on our web page,” the bank said in a recent statement.
“Kiwibank has acted proactively, openly, and transparently with the FMA on this matter. We are unable to comment any further now that it is before the courts.”
