ASB repays $8.9m to customers
Bank warned by Commerce Commission after overcharging customers millions of dollars.
ASB Bank is repaying $8.9 million to customers who were overcharged fees when they repaid loans early.
More than 48,000 early repayment fees were overcharged to ASB customers who terminated their fixed-rate term loans early between April 2005 and December 2016. The majority of these were home loans.
The Commerce Commission warned ASB its behaviour is likely to have breached responsible lending rules. The commission also considers the bank is likely to have breached the Fair Trading Act by making false or misleading representations about its right to charge the incorrect fees.
ASB began repaying customers in July 2020. Customers will be refunded the amount they were overcharged together with interest.
The commission said some customers were undercharged, but the bank won’t be claiming back money from these customers.
ASB reported the overcharging to the commission. The bank signed court enforceable undertakings this month, setting out how it will repay affected customers.
It’s the not the first time ASB has had to compensate customers.
In May, ASB agreed to repay $8.1 million to borrowers after admitting it breached responsible lending rules.
In our latest bank satisfaction survey, ASB scored the lowest for overall satisfaction.