Westpac NZ will pay $3.7 million in compensation to 19,365 customers after admitting it breached the Credit Contracts and Consumer Finance Act 2003.
The bank breached the law by failing to provide key information to credit card customers before they entered into their contracts.
Those affected were new credit cardcustomers who received their card without receiving a welcome letter containing disclosure information between May 2017 and March 2018.
Westpac reported the issue to the Commerce Commission in March 2018, who filed High Court proceedings against the bank in July last year.
Gina Dellabarca, Westpac NZ general manager of consumer banking and wealth, said the error occurred during an upgrade to Westpac's IT systems, which resulted in the letter not being sent to more than 19,000 customers.
"We apologise to all the card holders affected and want to reassure our customers that our systems and processes have been upgraded," Dellabarca said.
Westpac NZ is contacting affected customers to inform them of the compensation payment, in line with procedures agreed with the Commerce Commission.
The Credit Contracts and Consumer Finance Act requires lenders to provide important information that helps consumers understand their rights and obligations under their loan before they enter into their loan contract.
In August last year, Westpac NZ refunded $7 million to 93,000 customers after reaching an agreement with the Financial Markets Authority and Commerce Commission over the bank failing to correctly discount fees on a number of different banking packages.
