ASB overcharged home loan break fees

The Commerce Commission has warned ASB after finding the bank had overcharged home loan borrowers early repayment adjustment fees.

The commission warned ASB it was likely to have breached lending laws by failing to act with the care, diligence and skill of a responsible lender, as well as breaching the Fair Trading Act by making false or misleading representations of its right to charge the incorrect fees. ASB has agreed to repay about $8.9 million to borrowers who broke their fixed-term home loans between April 2005 and December 2016.

The bank has also provided the commission with ‘‘enforceable undertakings’’ explaining how it will locate the borrowers it overcharged to give them their refunds.

It is the second time this year ASB has had to pay money to customers as a result of mistakes that led to lending law breaches. In May, it began making $8.1m in compensation payments to about 73,000 borrowers who had home loans and personal loans with the bank between June 2015 and July 2019.

As a result of the $8.9m settlement with the commission, impacted customers will be paid the difference between the amount they should have been charged, and the amount ASB actually charged them, together with interest, the commission said.

The bank had spotted its error, and reported it to the commission.