The High Court has fined The Co-operative Bank nearly $2.5 million for overcharging customers.
The penalty follows the bank’s admission of breaches last year, after it reached a settlement with the Commerce Commission. ComCom said just over 48,000 customers were overcharged a total of approximately $7.225 million.
That amount has since been repaid.
The Co-operative Bank self-reported the breaches under the Credit Contracts and Consumer Finance Act, acknowledging the overcharging resulted from a series of compliance and process failures.
The commission said the bank imposed 12 “unreasonable fees” across its lending products, including home and personal loans. Most of these charges occurred between June 2015 and November 2021.
In her judgement, Victoria Heine said the circumstances behind the breaches differed for each fee but pointed to “a fundamental failure within Co-operative at that time to appreciate what was needed to comply with the fees provisions.”
She added that the penalty is sufficient to help deter others from risking non-compliance.
For Commerce Commission director of credit Sarah Bartlett, investing in compliance and rigorously auditing processes and controls is crucial to avoiding investigations, court action, and significant penalties.