Westpac Bank will pay thousands of customers a total of $3.7 million after a credit card processing error, as part of a settlement with the Commerce Commission.
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Westpac will admit in court that it breached the Credit Contracts and Consumer Finance Act when it failed to give 19,000 new customers disclosure information about their credit terms, when they were issued credit cards between May 2017 and March 2018.
The bank said the problem was caused by a computer error, which meant customers were not sent a physical letter with the information.
Westpac reported the issue to the Commission in March 2018 and apologised to customers.
"We apologise to all the card holders affected and want to reassure our customers that our systems and processes have been upgraded," Westpac New Zealand consumer banking and wealth general manager Gina Dellabarca said.
It has begun contacting affected customers about compensation payments.