BNZ fined $2.6 million after misleading some customers with non-profit accounts

2:11 pm today

Photo: RNZ / Marika Khabazi

The Bank of New Zealand (BNZ) will pay a $2.6 million fine after admitting it misled customers on how interest is calculated on some non-profit bank accounts.

The Financial Markets Authority said the breach of the fair dealing rules took place over a nine-year period, from December 2014 to February 2024, affecting 23,103 customers.

The interest was supposed to be calculated daily, but was calculated on the lowest monthly balance instead, resulting in customers being underpaid a total of $5.39m.

BNZ self-reported the issue to the FMA and paid out the correct interest to affected customers, plus interest on the use of their money for a total of $5.44m.

"Financial institutions must ensure their terms and customer communications are accurate and reflect how products work in practice. In this case, BNZ's representations about how interest was calculated were inconsistent with the actual approach taken, leading to customer harm," FMA's head of enforcement Margot Gatland said.

Gatland said BNZ had cooperated with the FMA and took steps to fix the issue, including updating its terms, stopping offering these accounts in February 2025, and moving customers to new products.

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