ASB faces new Commerce Commission court action over lending law breaches

ASB is facing a fresh legal fight as the Commerce Commission prepares to file High Court action alleging breaches of the CCCFA.

The Commerce Commission is preparing to file proceedings in the High Court against ASB for alleged breaches of lending laws.

The Commission said the alleged breaches relate to the Credit Contracts and Consumer Finance Act 2003 (CCCFA) in connection with the provision of overdrafts and debt collection overpayments.

The Herald has contacted ASB for comment.

This is the latest in a string of issues ASB has had with regulators in the past few years.

The bank entered a settlement with the Commerce Commission in 2021 and repaid over $8 million to some borrowers because they breached loan disclosure laws.

Borrowers brought a class action lawsuit against ASB because of this and they settled for more than $135m in October this year.

The bank also faced legal action from the Financial Markets Authority (FMA) for allegedly failing to apply multi-policy discounts to some customers who bought insurance from them.

ASB apologised and acknowledged mistakes alongside making refunds to some customers, but the case continues in the High Court.

Insurer IAG, which provides home insurance sold through the bank, was fined almost $20m at the High Court in October for overcharging customers and making mistakes in calculating government levies.

ASB is also being investigated by the commission for self-reported financial breaches of lending laws.