TSB fined $2.47 million for overcharging 42,000 customers

The High Court has fined TSB Bank $2.47 million for breaching the Credit Contracts and Consumer Finance Act (CCCFA) by overcharging tens of thousands of customers.

The bank admitted overcharging 42,000 credit contract customers fees worth about $3.6 million between June 2015 and November 2021.

Justice Pheroze Jagose said he considered the bank’s actions in charging unreasonable credit and default fees over such a long period were “high gravity”.

“They strike directly at the Act’s objective of establishing efficient, fair and transparent credit and default fees under consumer credit contracts between creditors and responsible lenders,” he said in a judgement.

The bank self-reported to the Commerce Commission after an internal review uncovered the overcharging and has refunded the fees with interest at a cost of about $6 million.

Commerce Commission deputy chair Anne Callinan said the penalty was a reminder to lenders to meet their obligations under the CCCFA.

“The rules around credit and default fees are well established and we expect lenders like TSB to have proper processes in place to make sure they’re following their obligations under the CCCFA,” she said.