More than 100,000 Westpac New Zealand customers were overcharged when they withdrew money from Westpac ATMs while in Australia between October 2012 and August 2014.

The 108,000 customers who were overcharged more than $5 will be compensated after Westpac reported its error to the Commerce Commission and Financial Markets Authority. Westpac will pay out more than $4 million – so on average customers will receive $37 each.

Westpac had told its customers ATM transactions in Australia would be converted into New Zealand dollars using a rate of exchange fixed by card schemes Visa and Mastercard. But the rate it charged was higher than that fixed by the card schemes.

Westpac will not compensate the 60,000 customers who were overcharged less than $5. Their overpayments total $125,000, which will be donated to the Mangere Budgeting Services Trust. Any former customers who can’t be contacted or have died will have their compensation donated to the Trust.

Westpac self-reported the potential breach of the Fair Trading Act in late 2014. The commission will monitor Westpac’s compensation process, but does not intend to take any further action.