ASB is repaying customers $8.1 million after admitting lending failures following an investigation by New Zealand's consumer watchdog.
The bank admitted it failed to ensure its systems and processes were sufficient for their home and personal loan customers between June 2015 and July 2019.
It agreed to repay the sum to around 73,000 borrowers who may have been affected by the breach under the Credit Contracts and Consumer Finance (CCCF) Act.
The self-reported error in September 2019 occurred when the bank's standard operation procedure was not "consistently" followed for customers making changes to the relevant repayment date, amount and frequency of their existing loan agreements, according to a Commerce Commission statement issued on Tuesday.
It meant some customers may not have been given information about these changes when variation disclosure was required.
"Lenders must exercise the care, diligence and skill of a responsible lender in all their dealings with borrowers," Commission chair Anna Rawlings said in a statement.
"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."
According to the settlement, 26,088 customers were identified by ASB and will receive a payment of $68 and 47,032 customers will receive a payment of $135.
