Co-operative Bank’s $2.48 million penalty for charging excessive bank fees amounts to seven per cent of net profits during the period 2019-21 when inadequate bank costings saw customers wrongly charged fees in excess of bank actual costs.
Some 28,200 customers were affected, with per-customer over-charges ranging from $45 to $70 on fees charged in excess of bank actual costs for loan establishment fees and also for fees on loan variations and mortgage discharges.
The High Court was told the Bank breached consumer credit requirements in the Credit Contracts and Consumer Finance Act, setting ‘unreasonable’ bank fees; in some cases undertaking no modelling as to bank costs before setting fees, in other cases setting fees in excess of known costs.
The Bank self-reported its errors to the Commerce Commission.
A negotiated penalty of $2.48 million was approved by the High Court.
The court was told the Bank has also directly compensated affected customers.
Consumer credit ‘responsible lender’ rules applying since 2019, designed to control predatory lending by so-called mobile traders, also apply to fees charged by retail banks.
Commerce Commission v. Co-operative Bank Ltd – High Court (31.03.26)
26.120