Westpac New Zealand has been hit with a $NZ3.64 million ($3.19 million) penalty by the New Zealand High Court for violating lender responsibility principles. The penalty follows multiple failures that resulted in customers not receiving legally mandated information concerning their loans, and in some instances, agreed upon interest rate discounts.
The Commerce Commission director of credit, Sarah Bartlett, stated that Westpac’s failure to invest in sufficient systems and processes led to borrowers and guarantors not receiving the necessary information to make informed financial decisions. According to the commission, the fine is the largest pecuniary penalty imposed under the Credit Contracts and Consumer Finance Act to date.
Justice Anderson noted in her judgment that Westpac could have taken several steps to prevent the harm, including changes to their systems, adequate staff training, and implementing mechanisms to identify and respond to issues. The penalty reflects Westpac’s remediation efforts, which have so far seen $NZ2.67 million returned to 11,398 affected borrowers.
Westpac New Zealand is a retail bank offering a range of financial services. The conduct also impacted up to 3012 guarantors, adding further weight to the seriousness of the breaches. The fine serves as a stark reminder to the consumer credit industry of the importance of investing in robust systems and compliance practices.
