BNZ to pay $2.6m after admitting it misled customers – 23,000 underpaid $5.39m in interest

Author: NZ Herald,
Publish Date: Wed, 17 Jun 2026, 2:06pm

The Bank of New Zealand has agreed to pay $2.6 million after admitting it breached fair dealing rules by misleading customers on how interest was calculated on some non-profit accounts.

In total, 23,103 customers were underpaid about $5.39m in interest they were entitled to.

BNZ self-reported the issue to the Financial Markets Authority (FMA) and has remediated affected customers, paying about $5.44m, including use of money interest.

BNZ chief executive CEO Dan Huggins said they accepted the FMA’s findings.

“[We] sincerely apologise to our customers who were impacted.

“Once we became aware of the issue, we commenced a review, self-reported to the FMA, and took the product off sale.

“Treating our customers fairly and delivering good customer outcomes is at the heart of what we do every day. We are committed to maintaining effective policies, processes, systems and controls to help ensure this kind of issue does not occur again.”

The issue occurred when BNZ updated its terms and conditions in 2014 to state that interest would be calculated daily.

However, from December 2014 to February 2024, for the non-profit accounts, BNZ calculated interest using a different method based on the lowest monthly balance, resulting in customers receiving less interest than they were entitled to.

BNZ became aware of the issue in September 2023 after a customer query.

FMA’s head of enforcement Margot Gatland said 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.”

BNZ agreed to pay $2.6m to the Crown through an enforceable undertaking.

It also made a commitment to developing and maintaining effective policies, processes, systems and controls to support good customer outcomes and prevent such issues from occurring in the future.