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Following a Commission Investigation, ASB has agreed to pay back $8.1m after lending failures.
A settlement was agreed with the Commerce Commission after the bank admitted that it failed to make sure its systems were in accordance to provide required information to more than 73,000 home and personal loan customers that made loan amendments.
Customers who have likely been affected by the breach of its lender responsibilities under the Credit Contracts and Consumer Finance Act will be paid back.
Those that enter into consumer credit contracts after July 6, 2015, are required to comply with the Act. Lenders must follow principles that exercise care, diligence and skill of responsibilities.
Commission Chair member Anna Rawlings says the error occurred when the operations were not being followed up consistently for customers making the changes and amendments to relevant repayment dates.
“Lenders must exercise the care, diligence and skill of a responsible lender in all their dealings with borrowers,” Rawlings said.
“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.”
“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.”
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