The Co-operative Bank acknowledged charging “unreasonable fees” for several years and has refunded a total of $7.225 million to customers.
This follows the bank reaching a settlement agreement with the Commerce Commission after an investigation into concerns about the fees it was charging customers.
According to ComCom, The Co-operative Bank imposed unreasonable charges on 12 different fees across its lending products, such as home loans, personal loans, home loan establishment fees, and overdraft facility fees.
The majority of customers incurred these fees between June 6, 2015, and November 30, 2021. The bank acknowledged charging excessive fees and refunded $7.225 million to 48,249 customers.
“Charging unreasonable fees doesn’t just erode trust in the banking sector – it has a direct and tangible impact on consumers’ wallets, often hitting those least able to absorb unexpected costs,” Commerce Commission director for credit Sarah Bartlett said.
Bartlett stated that the bank’s behaviour failed to meet the standards expected of a responsible lender.
“It failed to undertake regular fee reviews and invest in adequate systems, processes and controls to ensure it complied with the law.”
“Holding banks accountable is an important part of the Commission’s ongoing work to ensure compliance with consumer credit laws and to ensure people are able to borrow money safely and fairly.”
The Commission’s claims will now proceed to the High Court, which will determine the pecuniary penalty.