TSB Bank warned by NZ regulator for business account overcharging

New Zealand’s Financial Markets Authority (FMA) has issued a warning to TSB Bank Limited following a six-year period of incorrect fee charges on business accounts. Between November 30, 2017, and November 20, 2023, the bank applied a $0.25 fee to certain business cheque transactions that were not subject to fees under the bank’s own terms and conditions.

The error, which affected 7,309 customer accounts, stemmed from a 2017 update to the bank’s Business Cheque terms. While intended to increase clarity, the wording change resulted in a discrepancy between the bank’s stated policies and its automated charging systems.

TSB has reimbursed a total of $1.73 million to cover the incorrect fees, related interest, and compensation for the use of those funds. The FMA noted that TSB reported the issue itself and has worked constructively to complete the reimbursement process, though the warning highlights the extended duration of the error and the impact on customer trust.