Kiwibank to pay $ 5.2 million in remediation to borrowers, says Commerce Commission

Kiwibank will pay more than 48,000 borrowers a repair totaling $ 5.2 million, after admitting it did not act with the care, diligence and skill of a responsible lender, says the Commerce Commission.

Commerce Commission Chair Anna Rawlings said Kiwibank reported a year ago that it had not implemented robust mortgage loan variance disclosure policies, procedures and systems.

Those flaws affected the information you provided to some clients when they made simple changes, such as re-fixing interest rates or changing repayment amounts, he said.

On August 27, the bank entered into a settlement agreement with the Commerce Commission, it said.

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In the settlement, Kiwibank admitted that it had not acted with the care, diligence and skill of a responsible lender and agreed to make the repair payments, Rawlings said.

Under the Consumer Finance and Credit Contracts Act of 2003, lenders must act with care and responsibility in all dealings with their clients, he said.

“This includes having adequate systems and processes in place to manage client accounts and support the lender’s compliance with legal obligations to its clients,” Rawlings said.

“While Kiwibank had policies in place to disclose more complex changes, failures in its system and process affected the information it provided to some customers when they made simple changes.”

Kiwibank informed the Commerce Commission in August 2019 that it had not implemented robust home loan variance disclosure policies, procedures and systems for certain types of home loan variance in the period prior to April 2019, it said.

Kiwibank will contact eligible customers for repair and any inquiries should be directed to the bank.