Commerce Commission files proceedings against Westpac
The Commerce Commission has announced that it has filed proceedings against Westpac New Zealand.
Since mid-2012 the Commission has been investigating alleged mis-selling of interest rate swaps to the rural sector by ANZ, ASB and Westpac between 2005 and 2009. The Commission has received a significant number of complaints from rural customers of those banks.
"We want to ensure that we have received information from all potentially affected customers before we take next steps in this investigation," said Commission Chairman Dr Mark Berry.
"We cannot be confident that any compensation sought in Court or that may otherwise be available will be obtainable for customers who have not made contact with us. We need rural customers to come forward and provide information that supports their position, if they want it to be taken into account. We now want to give those who have not been prepared to come forward one further chance to do so."
The Commission asks all affected customers – of any of the three banks – to contact the Commission before 30 May 30, 2014 if they wish their concerns to be considered. Customers can complete the questionnaire on the Commission's website, or can call the Commission's contact centre on 0800 943 600.
Interest rate swaps are a financial derivative product that allows a borrower to manage the interest rate exposure on their borrowing. They were typically provided to large corporate and institutional customers, but from 2005 were offered by various banks to rural customers throughout New Zealand.
On 17 December 2013, the Commerce Commission announced that it has advised three major New Zealand banks (ANZ, ASB and Westpac), that it intended to issue legal proceedings over their sales of interest rate swap contracts to rural customers.
In April 2014, the Commission announced it anticipated making a further announcement mid-year, once it has furthered discussions with each bank about the information it holds and any possible resolution of the Commission's concerns. The Commission has entered into a 'standstill agreement' with each bank meaning there will be no barrier to any proceedings brought by the Commission as a result of taking this extra time.
More information about the interest rate swaps case can be found at - http://www.comcom.govt.nz/fair-trading/interest-rate-swaps-2/
