Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

ASB Admits Responsible Lending Failures And Agrees To Pay Customers $8.1m Following A Commission Investigation


ASB Bank Limited (ASB) has entered into a settlement with the Commerce Commission after admitting it failed to ensure its systems and processes were sufficient to ensure that required information was given to more than 73,000 home and personal loan customers who made certain changes to their loans.

It has agreed to repay $8.1 million to customers who may have been affected by breach of its lender responsibilities under the Credit Contracts and Consumer Finance Act (CCCF Act).

The self-reported error occurred when the bank’s standard operating procedure was not consistently followed for customers making changes to the relevant repayment date, amount and frequency of their existing loan agreements either in branch or over the phone. This meant that some customers may not have been given information about these changes when variation disclosure was required by the CCCF Act.

“Lenders must exercise the care, diligence and skill of a responsible lender in all their dealings with borrowers. In this case ASB’s responsible lending failures had the potential to affect a large number of borrowers entitled to receive key information when they made changes to their loans, including information about how the change impacted their overall obligations under their loans,” said Commission Chair Anna Rawlings.

“Lenders need not only to make sure that they understand their obligations under the CCCF Act, but also that they have robust internal processes in place to meet those obligations.”

A copy of the settlement agreement can be found on the Commission’s website.

Background

Variation disclosure
Variation disclosure is key information that lenders must give to borrowers when they make changes to an existing loan, such as repayment dates, repayment amounts and frequency of payments. It helps borrowers understand the impact of the change in relation to their obligations under the loan contract.

Lender obligations
Lenders entering into or varying consumer credit contracts after 6 June 2015 are required to comply with the lender responsibility principles, as set out in the Credit Contracts and Consumer Finance Act.

The lender responsibility principles require lenders to exercise the care, diligence, and skill of a responsible lender always, including during all subsequent dealings with borrowers and guarantors.

They must also treat borrowers reasonably and with respect.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

QV: Tax Changes Yet To Dampen Red-Hot Housing Market

Just over a month has passed since the Government announced measures aimed at dampening the rampant growth of the property market, and yet the latest QV House Price Index data shows the market hit a new high in April. The average value increased 8.9% nationally ... More>>

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>