Co-operative Bank Fined $2.482M for Unreasonable Fees, Remediates 48,249 Customers $7.225M

Home News and events News and updates Co-operative Bank penalised $2.482 million for charging customers unreasonably

Co-operative Bank penalised $2.482 million for charging customers unreasonably

The High Court has imposed a $2.482 million penalty on Co-operative Bank for breaching the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

Published 02 April 2026

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The judgment comes after Co-operative Bank and the Commerce Commission entered into a settlement agreement last year and the bank admitted to the breaches.

The Commission’s investigation started after Co-operative Bank self-reported its conduct.

Commerce Commission Director, Credit Sarah Bartlett says the Co-operative Bank has remediated 48,249 customers approximately $7.225 million for charging the higher fees.

In her judgment, Justice Heine noted the circumstances behind the breaches varied from fee to fee. However, they “suggest that there was a fundamental failure within Co-operative at that time to appreciate what was needed to comply with the fees provisions”.

Co-operative Bank accepted the overcharging occurred after a series of compliance and process failures.

Ms Bartlett says it is crucial banks have robust compliance practices and adequate processes and controls in place to ensure they are catching these sorts of issues.

“Investing in compliance and rigorously auditing processes and controls is a crucial step towards avoiding an investigation, court action and a hefty penalty,” she says.

Co-operative Bank charged twelve unreasonable fees across its lending products involving home loans and personal loans, including Home Loan Establishment Fees and Overdraft Facility Fees, with most being charged during the period of 6 June 2015 to 30 November 2021.

Justice Heine said the penalty "is not an amount that would be seen as merely the costs of doing business”.

“I am satisfied that the penalty proposed is sufficient to contribute to deterring others from running the risk of non-compliance,” she stated in the judgment.

A copy of the judgment will be made available on the case register.

Background

The Commission opened an investigation into Co-operative Bank after the bank first alerted the Commission to the concerns it had about the fee amounts it had charged customers. The Commission has obtained further information during the subsequent investigation.

A full list of relevant fees which the Commission considered to be ‘unreasonable’ is below:

• Home Loan Establishment Fee
• Restructure Fee (also referred to in the relevant period as the Home Loan Top Up Fee)
• Home Loan Variation Fee
• Revolving Credit Facility Fee
• Early Repayment Fee (also referred to in the relevant period as the Early Full/part Repayment Fee)
• Security Discharge Fee (also referred to in the relevant period as the Full or Partial Mortgage Discharge Fee)
• Mortgage Discharge Fee (also referred to in the relevant period as the Mortgage Discharge Fee (where no loan balance) Fee)
• Rates Demand Fee
• Personal Loan Establishment Fee
• Vehicle Loan Establishment Fee
• Overdraft Facility Fee
• Cash Advance Fee (also referred to in the relevant period as the Fair Rate Credit Card Cash Advance Fee)

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