The Commerce Commission has filed proceedings against Westpac New Zealand Ltd for allegedly breaching lender responsibility principles, after multiple failures meant customers did not receive legally required information about their loans and, in some cases, agreed interest rate discounts.
Commerce Commission General Manager, Competition, Fair Trading and Credit, Vanessa Horne says the Commission expects banks to invest in robust compliance practices to ensure they are complying with the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
Ms Horne says banks' failure to do so can have a detrimental impact on their customers and deprive people of crucial information they are entitled to.
The Commission believes Westpac failed to invest in adequate systems and processes to ensure it complied with its CCCFA obligations.
These failures led to a lack of required disclosure to borrowers and guarantors and failing to apply agreed discounts to interest rates to some customers' home loans.
Westpac has admitted to the breaches and is finalising its remediation for the borrowers impacted.
The Commission is seeking declarations that Westpac breached the responsible lending principles and pecuniary penalties. Westpac and the Commission entered into a settlement agreement prior to filing the proceedings to conclude matters on these terms.
The responsible lending principles impose obligations on lenders when advertising, before entering into a loan, and during all subsequent dealings with borrowers and guarantors.
