Westpac New Zealand is facing legal action over its lending practices.
The Commerce Commission has taken Westpac to the High Court alleging the bank breached the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
The proceedings relate to Westpac conduct between May 2017 and March 2018, when the bank failed to provide key initial disclosure information to 19,000 personal credit card customers when they first took out their credit card.
The commission alleges that due to a process error, when Westpac posted new credit cards to some customers, they did not also receive disclosure of the terms of credit.
Now, the Commission is seeking a declaration that Westpac breached its initial disclosure obligations under the CCCFA. It is also seeking an order for the return of costs of borrowing to affected borrowers and an order for payment of statutory damages to affected borrowers.
“This is an important case for both the commission and borrowers,” Commerce Commission chair Anna Rawlings said.
“This case is important for clarifying the scope of lender liability to borrowers, in a situation where thousands of customers were not provided with initial disclosure required under the law. The law provides for remediation for customers when their lender fails to give disclosure properly.
“[I]n this case we are asking the Court to determine whether Westpac breached its obligations, and if so, to decide how those statutory remedies should be applied,” she added.
The Commission stated that it will make no further comment as the matter is now before the court.