KEY POINTS:
ASB has admitted to breaching the Fair Trading Act by not properly disclosing currency conversion fees to credit and debit card customers.
The bank is the sixth major bank to plead guilty in a Commerce Commission-led crackdown on the practice.
ASB agreed it had failed to disclose fees of up to 2.35 per cent on credit and debit card currency conversions between March 2002 to March 2005.
The bank plead guilty to 26 charges of breaching the Act in the Auckland District Court today, and was fined $600,000.
It agreed to place $3.5 million in a compensation fund for affected customers, and pay $80,000 in costs.
The commission said New Zealand banks have now paid out over $26 million in relation to the hidden fees.
Other prosecutions have involved ANZ National, BNZ, Westpac, and Kiwibank, while proceedings continue against American Express, Diners Club, TSB and the Warehouse Financial Services.
Affected ASB customers used cards under the brand names of ASB Bank, Bank Direct, Sovereign Go, New Zealand Home Loans and AA MasterCard.
Most will receive their compensation in the next month.
Commerce Commission chairwoman Paula Rebstock said banks knew fees were important in other areas to attract business.
"But as long as these foreign exchange fees remained hidden, there was no incentive for banks to lower them."
She said fees in the finance sector were also an ongoing priority for the commission , and it was investigating the reasonableness of late payment penalty fees on credit cards.
- NZPA
