The Commerce Commission has secured settlement agreements with ASB, TSB and Nelson Building Society for breaches of the Credit Contracts and Consumer Finance Act.
The three lenders admitted to breaching responsible lending requirements, with all lacking adequate systems to ensure compliance. Affected customers will receive remediation from the lenders, which self-reported their breaches.
ASB failed to conduct affordability and suitability assessments when establishing or varying overdrafts, and lacked systems to ensure proper disclosure. The bank also failed to detect and reimburse customer overpayments.
TSB lacked sufficient processes to meet lender responsibility principles and did not have suitable governance to ensure consistent compliance assessment of overdraft products. Some breaches resulted in borrowers being overcharged and not receiving required information.
Nelson Building Society admitted to interest overcharges and lacked adequate systems for continuing disclosure when loans were changed. The society also did not properly assess affordability for 37 migrant workers.
The settlements mark the end of the Commerce Commission's enforcement of the CCCFA, with responsibility transferring to the Financial Markets Authority from Wednesday. During its 20 years of enforcement, the Commission brought more than 60 court cases, winning penalties and reparations totalling over $100 million and overseeing remediation of close to $90 million to consumers.
Commerce Commission deputy chair Anne Callinan said the settlements "bookend a successful enforcement portfolio", adding: "We've taken action across the spectrum of lenders under the CCCFA, big and small. The constant throughout has been a focus on protecting consumers."