The Commerce Commission has filed High Court proceedings against Westpac New Zealand Ltd.
The Commission alleges the bank breached the Credit Contracts and Consumer Finance Act 2003 (CCCFA) by failing to provide key information that it was required to give customers under the law.
Westpac reported to the Commission in March 2018 that it had failed to provide key initial disclosure information to 19,000 personal credit card customers when they first took out their credit card between May 2017 and March 2018. The Commission alleges that, due to a process error, when Westpac posted new credit cards to some customers, they did not also receive disclosure of the terms of credit.
The Commission is seeking a declaration that Westpac breached its initial disclosure obligations under the CCCFA and is seeking an order for the return of costs of borrowing to affected borrowers and an order for payment of statutory damages to affected borrowers.
Commission Chair Anna Rawlings says this is an important case for both the Commission and borrowers.
“This case is important for clarifying the scope of lender liability to borrowers, in a situation where thousands of customers were not provided with initial disclosure required under the law,” says Ms Rawlings.
“The law provides for remediation for customers when their lender fails to give disclosure properly and in this case we are asking the Court to determine whether Westpac breached its obligations, and if so, to decide how those statutory remedies should be applied.”
In late March 2019 the Commission announced it had filed proceedings against finance company Linsa Finance, seeking costs of borrowing or statutory damages for 1,700 loan contracts in respect of which key information was not disclosed.