BNZ Settles with Commerce Commission on Card Fees
Bank of New Zealand has reached a settlement with the Commerce Commission relating to the disclosure of currency conversion fees.
The fees were incurred by customers on overseas debit and credit card transactions, and online card payments made to international sites between January 2002 and December 2004. The Bank was one of eight New Zealand card issuers to have its foreign currency conversion disclosure reviewed as part of the Fair Trading Act 1986.
Bank of New Zealand is concerned that its practices at the time did not give customers sufficient information on currency conversion fees.
“Our disclosure on fees and charges was industry standard at the time, but we now accept that the level of disclosure was inadequate, says Blair Vernon, Bank of New Zealand general manager, Personal Financial Services.
“We are sorry that our disclosure didn’t reach acceptable standards, and for any inconvenience to customers. We will be contacting existing and previous customers to provide compensation as swiftly as possible.”
By agreement with the Commerce Commission, the Bank will provide compensation of $5 million to affected customers. The payment amount is a pro rata portion of the currency conversion fees paid by each customer during the relevant period. The fund will be subject to independent audit.
Payments to existing Bank of New Zealand customers will be made via direct credit by 31 October. Bank of New Zealand will contact previous customers by mail and advertising to arrange for payments. Previous customers can choose to receive a cheque or alternatively give their current account details by 30 November.
Since October 2003, Bank of New Zealand has disclosed the currency conversion fees it charges on credit card billing statements as well as other cardholder documentation. It maintains that credit cards remain a safe, convenient form of international payment whilst overseas or when making purchases over the internet.