FILE PHOTO: A woman walks past an illuminated logo for Australia’s Westpac Bank in Sydney, Australia, September 6, 2017. REUTERS/Steven Saphore
July 11, 2019
(Reuters) – New Zealand’s commerce watchdog has sued Westpac’s local arm <WBC.NZ> for breaching consumer law by not disclosing key terms to thousands of credit card clients.
This comes as New Zealand looks to increase regulatory oversight of its banking sector after Australian counterparts came under fire for widespread misconduct exposed by a year-long Royal Commission inquiry into the sector.
The commission said it is seeking return of costs and statutory damages to affected borrowers.
“This case is important for clarifying the scope of lender liability to borrowers, in a situation where thousands of customers were not provided with initial disclosure required under the law,” Commission Chair Anna Rawlings said.
A Westpac spokesman said the lender had discovered in March last year that disclosure documents had not been sent to 19,365 new credit card customers due to an error during a systems upgrade and had “proactively notified the Commerce Commission”.
“We also refunded fees and interest charges to customers who were in default, and have made changes to make sure this issue is not repeated,” the spokesman told Reuters in an email, declining to comment further as the case is before the courts.
The watchdog’s statement said Westpac had reported last year its failure to disclose key details to 19,000 personal credit card customers when they first took out their credit card between May 2017 and March 2018.
New Zealand shares of Westpac, also the No.2 lender in neighboring Australia, fell as much as 1.2% compared with a broader benchmark <.NZ50> which was 0.2% higher. Westpac shares in Australia <WBC.AX> were trading flat.
(Reporting by Devika Syamnath in Bengaluru; Editing by Muralikumar Anantharaman and Himani Sarkar)