meta_id 3283940

On October 10, 2024, the Commerce Commission filed civil proceedings in the High Court against TSB Bank Limited seeking declaratory orders and pecuniary penalties for breaches of the Lender Responsibility Principles under the Credit Contracts and Consumer Finance Act 2003 (CCCFA). The breaches primarily occurred between June 6, 2015 and November 30, 2021, with certain issues continuing until December 1, 2023. TSB self-reported the violations and admitted that it failed to maintain sufficient and robust processes and controls to ensure compliance with the Lender Responsibility Principles. Specifically, TSB lacked suitable governance arrangements to ensure its overdraft products were consistently assessed for compliance with applicable requirements. Some breaches resulted in borrowers being overcharged, while others resulted in borrowers not receiving all information TSB was obligated to provide under the Lender Responsibility Principles. The breaches relate to sections 9C(2)(ii), 9C(1), and 9C(2)(iii) of the CCCFA. TSB consented to the Commission seeking the orders following a settlement agreement entered into by the parties in advance of filing. The case (reference numbers PRJ0047707 and PRJ0048948) remains open. This action demonstrates the Commerce Commission's enforcement focus on lender compliance with consumer credit protections, particularly regarding governance and product assessment processes. Financial institutions offering credit products should review their compliance frameworks to ensure robust controls are in place for assessing products against the Lender Responsibility Principles and for maintaining accurate borrower records and communications.