It was part of the bank’s settlement with the Commerce Commission which also included $2.7m to compensate the 40 eligible customers who registered their complaints with the commission and $250,000 towards the commission’s costs.
Mark Heer, ASB’s general manager rural told Dairy News the Dairy Women’s Network donation was proposed by ASB, which already sponsors the network, and agreed by the Commission.
“The donation is over and above our ongoing support. The Dairy Women’s Network provides women involved in the dairy sector with support, advice and business knowledge and skills through its education and development initiatives. Those are important outcomes and the donation will assist the Network to achieve them.”
The Commission’s investigation into ASB looked primarily at whether the bank had marketed interest rate swaps for farmers in a way that may have misled customers as to their benefits, risks and suitability. The Commission considers that ASB’s behaviour was likely to have breached the Fair Trading Act – ASB did not accept its conclusions fully but agreed to a settlement.
The commission says the smaller settlement amount compared to the recent ANZ $19 million settlement is because the ASB chose not to increase farmers’ loan margins, meaning that the settlement relates primarily to early termination fees paid by eligible customers. Secondly, the commission received a much smaller volume of complaints about ASB’s swaps.
The commission will begin contacting the 40 customers this month who may be eligible for a payment. Only those who registered with the commission will get compensation. Payment offers will then follow, with funds expected to be distributed by the second half of 2015.
