Latest news with #FinancialMarketsConductAct2013
1News
7 days ago
- Business
- 1News
Kiwibank warned for overcharging thousands of customers
Kiwibank has been formally warned by the Financial Markets Authority (FMA) for failing to correctly apply aged-based fee waivers to thousands of joint account holders over a 13-year period, resulting in more than $900,000 in overcharges. Between July 2011 and November 2024, Kiwibank incorrectly charged transaction fees to 8,663 joint account customers, despite promotional materials stating that customers under 18 or 19 years old, or over 65, would be exempt. It affected joint accounts where the secondary account holder met the age-based criteria but the primary holder did not. Kiwibank was first alerted to the issued by a customer complaint in June 2023, with a staff member identifying the potential for the issue to be more widespread in December 2023. The morning's headlines in 90 seconds, new report into submersible implosion, body found in Auckland park, and mixed injury news for the Warriors. (Source: 1News) ADVERTISEMENT The issue was subsequently investigated and validated, leading to Kiwibank reporting itself to the FMA in August last year. The FMA found that 6,400 customers were affected after the Financial Markets Conduct Act 2013 (FMC Act) came into force in April 2014, with overcharges totalling $747,000. Under the FMC Act, financial service providers must not make false or misleading representations. The FMA said Kiwibank's account statements had misrepresented its right to charge fees and was a likely breach of the Act's fair dealing provisions. FMA executive director for response and enforcement Louise Unger said financial service providers had a responsibility to clearly and accurately communicate fees and ensure they charged what was promised. "It is also important that financial service providers have appropriate policies, procedures and controls in place to identify and address any fee-related issues in a timely fashion." Two root causes of the issue were identified, Unger said. "First, a lack of common understanding across Kiwibank about whether, and how, the fee waiver should apply to joint accounts. Second, a system design limitation where the age-based fee waivers could only be applied based on the primary account holder's age. ADVERTISEMENT "We recognise Kiwibank's cooperation and proactive effort to address the issue, including notifying the FMA and remediating impacted customers (including use-of-money interest). However, our view is that, in this instance, the issue could have been identified earlier with better product governance and internal controls." In a statement to 1News, Kiwibank acknowledged the warning, saying it took the matter seriously and regretted the error. "We have taken steps to fully reimburse impacted customers and have strengthened our internal policies, systems and controls to prevent this from happening again," a spokesperson said. "We acknowledge the FMA's findings and appreciate their recognition of our cooperation and proactive efforts to address this issue, including self-reporting it to the FMA and remediating impacted customers. "We remain committed to fair and transparent banking practices and will continue to improve our processes to ensure we meet the expectations of our customers and regulators."
NZ Herald
7 days ago
- Business
- NZ Herald
Financial Markets Authority warns Kiwibank for overcharging customers more than $900k
'We remain committed to fair and transparent banking practices and will continue to improve our processes to ensure we meet the expectations of our customers and regulators.' Since at least 2011, Kiwibank charged account fees on joint accounts where the secondary account holder met the age-based criteria, but the primary holder did not. Between approximately March 2005 to November 2024, different versions of Kiwibank's Fees and Limits brochures represented that customers would not be charged transaction fees on certain accounts if they were under 18 or 19 years of age or over 65. However, since at least 2011, Kiwibank charged account fees on joint accounts where the secondary account holder met the age-based criteria, but the primary holder did not. Kiwibank was first alerted to the issue following a customer complaint in June 2023. Six months later a Kiwibank staff member identified the potential for the issue to be more widespread and not limited to a single customer. The bank investigated and validated the issue before self-reporting to the FMA in August 2024. FMA's executive director for response and enforcement Louise Unger said a bulk of the overcharging – 6400 customers for a total of $747,000 – came after the Financial Markets Conduct Act 2013 (FMC Act) came into force. 'This amount and duration is not insignificant,' Unger said. 'The responsibility is on financial service providers to clearly and accurately communicate their fees, as well as ensure that they charge fees in line with what they have promised. 'It is also important that financial service providers have appropriate policies, procedures and controls in place to identify and address any fee-related issues in a timely fashion.' Unger said there were two main root causes for the issue. 'First, a lack of common understanding across Kiwibank about whether, and how, the fee waiver should apply to joint accounts. Second, a system design limitation where the age-based fee waivers could only be applied based on the primary account holder's age. 'We recognise Kiwibank's cooperation and proactive effort to address the issue, including notifying the FMA and remediating impacted customers (including use-of-money interest). However, our view is that, in this instance, the issue could have been identified earlier with better product governance and internal controls.'
Scoop
03-07-2025
- Business
- Scoop
FMA Investigation Into Senior Trust Capital Ltd Ongoing
An investigation opened in November 2024 by the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – into senior living sector financier, Senior Trust Capital Limited (STC), is ongoing. STC is an issuer under a regulated offer of shares. On 14 May 2025, STC voluntarily withdrew its public offer of shares. The scope of the investigation includes considering disclosures made by STC in its previous product disclosure statement (PDS) and associated advertising material and whether those disclosures complied with Parts 2 and 3 of the Financial Markets Conduct Act 2013. Concurrently with the investigation, the FMA has engaged with STC about aspects of its business. As part of discussions between the FMA and STC, the FMA has asked STC to disclose certain information to its investors. STC has now done so as part of an STC investor communication dated 27 June 2025, which can be found here. Any investors who may have queries about the above or their investment in general should seek advice from a legal or financial adviser. Please note: the FMA has previously issued an update on investigations into Senior Trust Retirement Village Income Generator Limited (STIG). STC and STIG are two different but related entities.
Scoop
27-06-2025
- Business
- Scoop
Former CBL Group CFO Ordered To Pay Penalty And Costs For Continuous Disclosure Breaches
Former CBL Group Chief Financial Officer (CFO), Carden Mulholland, has been ordered to pay a pecuniary penalty of $641,250 for breaches of the continuous disclosure requirements in the Financial Markets Conduct Act 2013 (FMCA), in proceedings brought by the Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko. He has also been ordered to pay agreed costs of $606,216.53. CBL Corporation Limited (CBLC) publicly listed in October 2015, and the contraventions occurred over a five-month period in the lead up to its subsequent collapse in February 2018. The High Court's penalty decision follows a nearly six-week trial in the Auckland High Court before Justice Gault, which commenced in late June 2024 and concluded in early August 2024. The FMA's case against Mr Mulholland centred on his role as CFO of the CBL Group (for which CBLC was the parent company) and as a member of CBLC's Disclosure Committee. He was also a director of CBLC's European subsidiary, CBL Insurance Europe dac (CBLIE). The Judge found that Mr Mulholland had the required level of knowledge and participation in three of CBLC's continuous disclosure contraventions to make him personally liable as an accessory. These related to: The existence and impact on regulatory solvency of approximately $35 million of aged receivables (insurance premiums owed to CBLI but not paid to it). This issue was known to CBLC by 24 August 2017 but not disclosed to the market until 5 February 2018. The need for CBLI to strengthen its reserves by approximately $100 million. This was known to CBLC by 25 January 2018 but not disclosed to the market until 5 February 2018. A direction issued to CBLIE by its prudential regulator, the Central Bank of Ireland, requiring CBLIE to hold additional cash reserves of €31.5 million. This was known to CBLC by 30 January 2018 at the latest but not disclosed to the market until 7 February 2018. After the liability finding, the FMA and Mr Mulholland reached agreement on the recommended level of penalty that the Court has now approved. In his penalty decision Justice Gault said, 'As the FMA submitted, the lack of disclosure by CBLC meant investors were denied timely access to material information and continued to trade, uninformed, for an extended period of more than five months...I have addressed Mr Mulholland's significant involvement in these contraventions. The impact on the market was serious and far-reaching.' In assessing the appropriate penalty, the Judge noted that 'The penalty imposed against Mr Mulholland as a senior officer with specific responsibilities in relation to disclosure needs to reflect the importance of listed companies making prompt and accurate disclosures to the market, as well as his specific involvement in the contraventions.' FMA Head of Enforcement, Margot Gatland welcomed the Court's decision, saying the findings of liability and the subsequent pecuniary penalty imposed set an important precedent for holding a CFO accountable for an entity's continuous disclosure breaches. 'This was the first time New Zealand Courts had considered the liability of a CFO acting as an accessory to a company's contravention under the FMCA. The Court's ruling and penalty demonstrate that such behaviour is unacceptable and will not be tolerated. The FMA will continue to take action when we see this type of misconduct damaging the trust and confidence in New Zealand's financial markets and businesses.' The FMA proceeded to trial against MrMulholland, having reached in-court settlements with CBLC, its Managing Director Peter Harris, and its four former independent non-executive directors in 2023 and 2024, which saw them each admit seven contraventions and the Court make pecuniary penalty orders totalling $11.28 million. A related proceeding brought by the FMA alleging breaches of the FMCA in relation to CBLC's Initial Public Offering in 2015 is set down for a six-week trial commencing 13 April 2026 in the Auckland High Court.
Scoop
27-06-2025
- Business
- Scoop
Statement By The FMA On Senior Trust Retirement Village Income Generator Limited
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko is aware of several news articles over the last few days which refer to its recent engagement with Senior Trust. Margot Gatland, Head of Enforcement at the FMA says, 'In November 2024 the FMA – Te Mana Tātai Hokohoko opened an investigation into Senior Trust Retirement Village Income Generator Limited (STIG), which is ongoing. The scope of the investigation includes considering disclosures made by STIG in its previous product disclosure statement (PDS) and associated advertising material and whether those disclosures complied with Parts 2 and 3 of the Financial Markets Conduct Act 2013.' Concurrently with the investigation, the FMA has consulted STIG about aspects of its business. As part of the FMA's discussions with STIG, STIG has agreed to register an amended PDS. The FMA did not object to the PDS being lodged in its current form. STIG has issued an investor communication with more detail about the changes, which can be found here: 'We want to ensure that existing and prospective investors in STIG are aware that it lodged a new PDS on 16 June 2025 and that it differs substantially from earlier iterations,' says Ms. Gatland. 'Investors should also take particular note of the contents of STIG's June 2025 investor communication accompanying the PDS and accessible on its website alongside the new PDS at 'Any investors who may have queries about the above or their investment in general should seek advice from a legal or financial adviser.'
