Westpac said it relates to historical issues that it reported to the Commerce Commission in 2022. Photo: RNZ / Cole Eastham-Farrelly
- Commerce Commission takes Westpac to court for alleged breaches of lending rules
- Regulator says bank did not give people loan information or promised discounts
- Westpac admits breaches, remediating affected customers
- Comcom and bank agree approach to court for liability and penalties ruling
The Commerce Commission has started legal action against Westpac bank for allegedly breaching responsible lending rules.
The regulator said there had been multiple failures resulting in Westpac customers not receiving legally required information about their loans and, in some cases, interest rate discounts, as required by the Credit Contracts and Consumer Finance Act (CCCFA).
"The Commission believes Westpac failed to invest in adequate systems and processes to ensure it complied with its CCCFA obligations," competition, fair trading and credit manager Vanessa Horne said in a statement.
"These failures led to a lack of required disclosure to borrowers and guarantors and failing to apply agreed discounts to interest rates to some customers' home loans."
There was no detail on how many customers were involved nor how much they may be out of pocket.
Westpac has admitted the breaches and is finalising remediation for affected borrowers.
The two parties have agreed an approach to the court, with the Commission wanting a declaration that Westpac broke the lending principles and financial penalties.
The Commission has taken a rigorous approach to enforcing the CCCFA, leading the banking industry to complain about potential hefty burdens on the financial system.
A class action involving about 150,000 customers of ANZ and ASB is underway, while a move by the government to amend the CCCFA rules which might undermine the class action is currently before the Finance and Expenditure Select Committee.
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