Westpac NZ to pay back overcharged customers, donate money to charity

Westpac New Zealand has agreed to refund customers it accidentally overcharged for six years when paying their rates bills.

The mistake went unnoticed until this year, when a Lower Hutt man noticed he was paying more than a friend.

Hundreds of people were affected, and both Westpac and the council at first said it would not be worth it to work out the individual refunds, which are very small.

The bank instead agreed to donate $23,000 to charity - the total amount overcharged - but will now also refund customers.

Historic mistake

It was a chance conversation with friends that led Shaun McKenzie to question his rates bill. He was lamenting the fact he had to pay 2.1 percent for the convenience of paying his rates by credit card.

“Someone else said, ‘I only pay 1.9 percent in Porirua,’ so I decided to ask the council why they were getting a better deal than us.”

Enquiries revealed it was an historic mistake by Westpac, which set the fee incorrectly back in 2016. But neither the bank nor the council picked it up until McKenzie started asking questions.

No one from Hutt City was available for an interview. But in a written response to RNZ, chief financial officer Jenny Livschitz said Westpac had advised the total amount overcharged was “approximately $23,000 over 19,000 transactions”. “The largest amount overcharged in the last 12 months for a single transaction has been $1.36 [or $8.16 a year]. This would equate to a person paying $680 rates on their credit card and being overcharged 0.2 percent. “Westpac has now fixed this error and the pricing is back at 1.9 percent.

“Westpac has also advised us that due to the complexity of processing refunds and that the individual overcharge amounts are small, they are proposing to donate the overcharged amount to a charity that would benefit our ratepayers and residents. We have accepted that offer.” Westpac also declined an interview. Its public sector head Brent Chalmers said the bank offered its “sincere apology “to affected ratepayers.

“We have now fixed the pricing error, and are proposing to donate the overcharged amount to a charity that would benefit Hutt City Council ratepayers and residents.

“We have reviewed all other councils that receive the same service under the all-of-Government banking contract and can confirm their pricing is correct.” Westpac then decided to also pay back the individuals it overcharged, even though the amounts per customer were negligible.

“Westpac has since agreed to issue refunds to people who were overcharged for the processing fee,” said Hutt City Council spokesperson Jarred Griffiths. “Westpac will also donate the previously agreed amount to the Te Awa Kairangi Kai Collective.”