The Financial Markets Authority (FMA) has initiated civil action against ASB Bank for alleged misrepresentation concerning insurance and banking services.
The case brought against the ASB Bank has two main components. The Financial Markets Authority alleges that ASB Bank did not apply discounts on its ASB-branded insurance products for customers who hold multiple policies. Additionally, the FMA claims that ASB staff misled customers with caravan and trailer insurance policies into believing they qualified for the multi-policy discount when they did not.
The second aspect of the case involves ASB’s purported inconsistency in applying fee waivers across various customer account types that utilise the bank’s Fastnet Banking service. Specifically, this includes Society Cheque, Education Administration, and Business Focus accounts.
The FMA stated that ASB lacked sufficient systems and that the issues stemmed from mistakes in manual processes performed by employees.
A total of 23,062 customers were affected by the insurance issues, resulting in approximately $2 million in overcharged premiums.
Meanwhile, 2,435 customers have been impacted by the Fastnet Banking affair, and the overcharged amount was said to be around $1.1 million.
The Financial Markets Authority stated that ASB has addressed the root causes of both violations and has reimbursed affected customers. Although ASB’s remediation efforts were recognised, the duration it took to detect and rectify the errors influenced the FMA’s decision to initiate civil court proceedings.
In a related context, another financial institution named AA Insurance has recently been found to have breached Section 22 of the Financial Markets Conduct Act (FMC Act), leading to a penalty of $6.175 million.