Westpac is blaming an error during an IT upgrade for its blunder.
The bank reported to the Commission in March 2018 that it had failed to provide key initial disclosure information to 19,000 personal credit card customers when they first took out their credit card between May 2017 and March 2018.
The Commission alleges that due to a process error, when Westpac posted new credit cards to some customers, they did not also receive disclosure of the terms of credit.
The Commission is seeking a declaration that Westpac breached its initial disclosure obligations under the CCCFA and is seeking an order for the return of costs of borrowing to affected borrowers and an order for payment of statutory damages to affected borrowers.
Commission Chair Anna Rawlings says this is an important case for both the Commission and borrowers.
"This case is important for clarifying the scope of lender liability to borrowers, in a situation where thousands of customers were not provided with initial disclosure required under the law," Rawlings said.
Westpac spokesman Will Hine said, "In March 2018, Westpac NZ discovered that disclosure documents had not been sent to 19,365 new credit card customers. This was a result of an error that occurred during an upgrade to IT systems.
"Corrective disclosure was provided to these customers and we proactively notified the Commerce Commission. We also refunded fees and interest charges to customers who were in default, and have made changes to make sure this issue is not repeated."
The banks won't be making any other comment while the matter is before the courts, Hine said.
