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22 June 2026

BNZ

Overview

Bank of New Zealand (BNZ) breached fair dealing rules by misleading customers on how interest was calculated on some non-profit accounts.

BNZ updated its terms and conditions in 2014 to state that interest would be calculated daily.  However, from December 2014 to February 2024, it instead calculated interest using a different method based on the lowest monthly balance, resulting in customers receiving less interest than they were entitled to.

BNZ identified the issue in September 2023 following a customer query. A total of 23,103 customers were affected, with about $5.39 million in interest underpaid.  BNZ self-reported the issue to the FMA and has remediated affected customers, paying approximately $5.44 million, including use of money interest.

Timeline

17 June 2026

The FMA accepted an enforceable undertaking from BNZ, under which the BNZ admitted to misleading conduct and agreed to pay $2.6 million.

Related media release: BNZ admits misleading conduct and pays $2.6 million

 

Background

The FMA took action because BNZ breached fair dealing provisions in the Financial Markets Conduct Act by making misleading representations to customers about how interest would be calculated on certain accounts.

BNZ’s terms and conditions said interest would be calculated daily, but in practice it used a different method, resulting in customers being underpaid interest. This caused customer harm, with over 23,000 customers affected and approximately $5.39 million in interest underpaid.

The FMA’s role is to ensure financial markets are fair, transparent and that consumers are treated properly, so it took steps to:

  • hold BNZ accountable for misleading conduct 
  • ensure affected customers were properly remediated 
  • reinforce expectations around accurate disclosures and fair treatment 

The FMA accepted an enforceable undertaking from BNZ as its regulatory response.

Under this undertaking, BNZ:

  • admitted to the misleading conduct 
  • remediated affected customers (about $5.44 million repaid, including interest) 
  • agreed to pay $2.6 million to the Crown 
  • committed to improving its policies, processes, systems, and controls to prevent similar issues in future

This approach allowed the FMA to achieve accountability, compensation, and future compliance improvements without taking court proceedings. 

The FMA accepted an enforceable undertaking because BNZ self-reported the issue, cooperated with the investigation, and took steps to remediate affected customers.

An enforceable undertaking allowed the FMA to achieve a timely and efficient outcome without the need for court proceedings, which can be lengthy and resource intensive.