Westpac New Zealand will pay $4.5 million compensation to present and former customers for failing to disclose currency conversion fees on credit and debit card transactions.
Up to 200,000 people are in line for a payment, which will average about $22 but vary depending on each customer’s card use.
The bank reached a settlement with the Commerce Commission in the Auckland District Court yesterday for breaches of the Fair Trading Act.
The court had heard how Westpac customers were charged currency exchange fees which were not adequately disclosed between April 2002 and December 2004.
Westpac will also pay a fine of $570,000. It is the latest bank to plead guilty to breaches of the act after the Commerce Commission investigated others for similar misconduct.
In July, the Bank of New Zealand paid $5 million compensation to its customers and was fined $550,000.
Judge Roderick Joyce said: “Westpac took a decidedly economic approach to disclosure issues such as was bound to result in at least the vast majority of its customers being blissfully unaware - or at least less than well informed - of the true overall charges.”
Westpac chief executive Ann Sherry accepted that the bank had breached the Fair Trading Act at the time. She said currency conversion fees were now “extensively disclosed to our customers”.
Affected present and former Westpac customers should receive their refund by December 29. A Westpac spokesman said the bank was “focusing on tracking down all those eligible for reparations”.
He said the number of affected people could be as high as 200,000, with up to 300,000 accounts affected. “People will receive reparations in terms of their expenditure, which depends on the level of activity they had during that period.”