ASB has begun paying out $8.1 million in compensation to more than 73,000 home and personal loan customers after the bank was found in breach of its lender responsibilities.
It comes after the bank admitted it failed to give required information to customers who took out the loans between June 2015 and July 2019.
They are entitled to a payment of either $68 or $135 and will receive an email under the subject line "An important message about a payment to your account", according to Stuff.
ASB was in breach of its lender responsibilities under the Credit Contracts and Consumer Finance Act (CCCF Act).
The error was flagged by the bank when its standard operating procedure was not consistently followed for customers who were making changes to the relevant repayment date, amount and frequency of their existing loan agreements either in branch or over the phone.
It meant that some customers may not have been given information about the changes when variation disclosure was required by the law.
“Lenders must exercise the care, diligence and skill of a responsible lender in all their dealings with borrowers,” Commerce Commission Chair Anna Rawlings said.
"In this case ASB’s responsible lending failures had the potential to affect a large number of borrowers entitled to receive key information when they made changes to their loans, including information about how the change impacted their overall obligations under their loans.
“Lenders need not only to make sure that they understand their obligations under the CCCF Act, but also that they have robust internal processes in place to meet those obligations.”