Diners Club has become the eighth financial institution to plead guilty to breaching the Fair Trading Act by failing to properly disclose its currency conversion fees.
The breaches relate to Diners charge card transactions between January 3, 2002, and June 10, 2003.
When customers used their cards overseasduring that period they were charged a 1 per cent fee for each currency conversion, which was not declared on the Diners Club application forms for supplementary cards, nor on fee transaction schedules on its charge cards.
In the Auckland District Court today, Diners pleaded guilty to three charges of breaching the Fair Trading Act.
The company was fined $67,000 and agreed to pay $140,000 in compensation to affected customers. Diners Club will also pay $20,000 in costs to the Commerce Commission, which brought the charges.
This prosecution, along with the Commission's actions against ANZ National Bank, BNZ, Westpac, Kiwibank, ASB, TSB and The Warehouse Financial Services, have resulted in a total payout of $27,579,051 in compensation to customers, fines and costs.
"Customers want to be able to shop around for the best deal, but when the fees they are being charged aren't adequately disclosed it deprives them of the opportunity to make a fair comparison," said Commerce Commission chairwoman Paula Rebstock.
"The cumulative effect of these eight cases is a significant win for consumers, and a strong signal to banks and credit providers that the Commerce Commission will take action to ensure markets are competitive and responsive and consumers are well informed," she said.
Diners charge card holders who are eligible for compensation will be contacted by Diners Club.
