ASB Bank has agreed to pay more than $8 million to 78,000 of its customers after breaching responsible lending rules.
The bank admitted it failed to provide necessary information to customers who made changes to their existing home and personal loans about their new obligations, which is required under the Credit Contracts and Consumer Finance Act.
It self-reported the error to the Commerce Commission and reached an agreement to compensate customers.
Customers who entered into had loans with the bank between June 2015 and July 2019 would receive either $68 or $135, depending on when their loans originated.
Commission chairperson Anna Rawlings said it was important for lenders to exercise the care and diligence that was expected of them.
"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," she said.