Kiwibank to pay borrowers $5.2m

Kiwibank will pay more than 48,000 borrowers remediation totalling $5.2 million, after admitting it failed to act with the care, diligence and skill of a responsible lender, the Commerce Commission says.

Commission chair Anna Rawlings said Kiwibank reported a year ago that it failed to have in place robust home loan variation disclosure policies, procedures and systems. Those failures affected the information it provided to some customers when they made simple changes such as re-fixing interest rates or changing repayment amounts, she said.

On August 27 the bank entered into a settlement agreement with the Commerce Commission. In the agreement Kiwibank admitted that it had failed to act with the care, diligence and skill of a responsible lender and agreed to make the remediation payments, Rawlings said.

Under the Credit Contracts and Consumer Finance Act 2003, lenders must act carefully and responsibly in all their dealings with their customers, she said.

‘‘This includes having appropriate systems and processes in place to manage customer accounts and to support compliance with the lender’s legal obligations to its customers.’’

Kiwibank reported to the Commerce Commission in August 2019 that it failed to have in place robust home loan variation disclosure policies, procedures and systems for certain types of home loan variations in the period before April 2019, she said.

Kiwibank chief executive Steve Jurkovich said the issues related to Kiwibank’s home loan variation policies, procedures and systems for certain types of changes requested by borrowers to their home loans.

‘‘We proactively identified the issue and reported it to the Commerce Commission, and we have worked constructively since then to resolve it,’’ he said.