The Financial Markets Authority says it has reached a settlement with ASB regarding the sale, promotion and marketing of interest rate swaps to some rural customers, following on from a Commerce Commission investigation last year.
The commission reached a separate settlement with ASB in December 2014. The FMA settlement was reached based on the conclusions from the commission's investigation and the FMA's engagement with ASB over the marketing of interest rate swaps to rural customers.
Under the settlement with the commission, ASB agreed to make $2.7 million available for payment to the eligible customers who registered their complaints with the statutory body. The FMA said that payment process was due to be completed soon.
ASB also agreed to pay $250,000 towards the commission's costs and another $250,000 to Dairy Women's Network, a charitable trust.
AdvertisementAdvertise with NZME.
Under the Financial Markets Conduct Act 2013, from April 1, 2014, the FMA has responsibility for regulating misleading and deceptive conduct in relation to any dealing in financial products or services.
The FMA's settlement with ASB focused on the regulator's expectations for ASB's future conduct and processes around its sales practices.
The activity investigated by the commission took place before April 2014.
As part of the FMA settlement agreement, ASB has agreed to appoint an independent third party to review its sale, promotion and marketing of two sample products, being interest rate swaps and term funds.
ASB has said it does not accept the conclusions from the commission's investigation, but has admitted that some of its conduct breached section 9 of the Fair Trading Act in relation to some of its rural customers.
The FMA did not carry out a separate investigation in this case.
"However, as a consequence of the commission's conclusions, the FMA had concerns about potentially misleading conduct by ASB, relating to the sale and marketing of interest rate swaps to some rural customers."