ASB set to repay $9million to customers

ASB Bank to pay back $9million to customers
ASB Bank to pay back $9million to customers Photo credit: ASB Bank

ASB Bank will repay customers $9 million for lending failures which resulted in borrowers being overcharged on Early Repayment Adjustment fees (ERA).

The Commerce Commission found the bank failed to act with the care, diligence and skill of a responsible lender.

Under the Fair Trading Act, the watchdog also ruled ASB as making false misleading representations of its right to charge the incorrect ERA fees.

ASB has agreed to repay approximately $8.9 million to borrowers who were overcharged and provided the Commission with enforceable undertakings.

Those affected will be paid back the difference between the amount that they should have been charged and the amount they were actually charged.

Over 48,000 ERA fees were overcharged for borrowers who had terminated their fixed rate term loans early between April 2005 and December 2016.

Of the affected loans, the majority of them were home loans.

Anna Rawlings, Commerce Commission chair, says "ASB identified these matters itself and reported them to the Commission. It developed a plan for compensating borrowers and it has begun making refund payments to affected customers."