TSB self-reported the issue to the Financial Markets Authority (FMA) and has paid $1,734,800 in remediation. This comprised $1,425,127 in refunded fees, $10,404 in related interest and charges, and $299,269 in compensation for the use of that money over time.
Trish Millward, FMA’s acting head of perimeter and response, said financial institutions need to ensure their systems and processes support fair customer outcomes.
“Customers should be able to trust that a bank charges them only what its terms and conditions say it will.
“TSB’s customers had no practical way to check these fees for themselves, and the overcharging went on for six years.
“When financial institutions make changes to their terms and conditions, they need to ensure that their systems can deliver those changes to their customers.”
In 2024, TSB was fined $2.47m after it was found to have charged unreasonable credit and default fees.
The bank charged about $3.6m more than it should have across 12 “unreasonable” credit and default fees over six years between June 2015 and November 2021.
In 2021, the bank was ordered to pay $3.5m in civil penalties for breaching anti-money laundering laws.
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