The Commerce Commission has warned the Bank of New Zealand (BNZ) over likely responsible lending breaches and failures to provide accurate and timely information to borrowers.
In late 2018, BNZ reported 15 potential breaches of the Credit Contracts and Consumer Finance Act 2003 (CCCF Act) to the Commerce Commission. They involved certain home loans, personal loans, credit cards, and overdrafts entered into or varied between June 06, 2015 and February 24, 2017 – with 11,956 customers affected.
Following its investigation, the commission said BNZ likely breached responsible lending and disclosure obligations under the CCCF Act.
“In the commission’s view, BNZ failed to meet the requirements of the CCCF Act, including making errors when delivering information required by the Act. For example, in some cases, BNZ provided incomplete or inaccurate disclosure, and, in other cases, disclosure was provided a day, a few days, or as many as seven months after the information should have been provided to borrowers,” said Commerce Commission chair Anna Rawlings.
“We expect lenders to regularly audit their systems to make sure that they can comply with consumer credit law or quickly identify problems if they arise, fix them, and provide appropriate remediation to borrowers.”
BNZ has co-operated with the commission throughout the investigation. In September 2020, it refunded $350 to each affected borrower, amounting to a total refund of over $1 million to more than 2,300 affected borrowers.
“BNZ has identified these matters itself and reported them to the commission, made remediation payments to its customers, and made system changes to reduce the risk of issues like this arising in the future. Taking into account those steps, and consistent with our Enforcement Response Guidelines, we have decided that it is appropriate to issue a warning to BNZ for this conduct,” Rawlings concluded.