August 6, 2019 / 6:42 AM / 19 days ago

UPDATE 1-Westpac NZ unit agrees to repay $4.6 mln over wrongly charged fees

* Wespact NZ arm agrees to repay about 90,000 customers

* Bank has completed major part of the work to refund -regulator (Adds Westpac comment, details on refund)

Aug 6 (Reuters) - Westpac Banking Corp’s New Zealand arm has agreed to refund about $4.6 million to customers who had been incorrectly charged for services, the country’s consumer watchdog said.

The Commerce Commission said it and Westpac came to an agreement along with the Financial Markets Authority on the steps the bank must take to repay NZ$7 million ($4.6 million) to affected customers.

Under the agreement, the bank will refund NZ$1.28 million to 60,000 customers for not applying discounts properly, and repay an additional NZ$5.7 million to 30,000 customers who did not receive appropriate relationship rewards.

The bank has already completed a significant part of the work to refund the affected customers, the commission said.

“We want to assure our customers that we have now changed our systems so that the issue does not occur again,” Gina Dellabarca, Westpac NZ Acting General Manager of Consumer Banking and Wealth, said in an emailed statement.

Westpac’s agreement to refund comes amid a tougher operating environment for Australian banks in New Zealand as regulators double down on compliance after remedial rules proposed by Australia’s year-long inquiry were considered to have gone easy on these lenders.

Just last month, New Zealand’s commerce commission said it had sued Westpac’s local arm for not revealing key terms to about 19,000 credit card clients. ($1 = 1.5272 New Zealand dollars) (Reporting by Niyati Shetty and Nikhil Nainan in Bengaluru; Editing by Himani Sarkar)

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