HSBC cautioned in New Zealand

The New Zealand Commerce Commission has warned state-owned lender Kiwibank and HSBC over the fees they charge customers for repaying mortgages early. The regulator completed an investigation into the fees after “a range of complaints from bank customers” following sharp declines in interest rates in late 2008 and early 2009.

Kiwibank and HSBC were warned over the formula used to calculate break fees until the middle of last year, which had “technical deficiencies” that likely breached the Credit Contracts and Consumer Finance Act. The lenders made voluntary payments to customers of $689,000 and $113,000 respectively.

ANZ, Westpac and GE Money, along with Kiwibank and HSBC, based their fees on wholesale rate changes, though the first three lenders weren’t found to be breaching the act. HSBC pushes the limits around the world, if HSBC Finance and HSBC’s purchase of Household International is any indicator. There is nothing to indicate HSBC’c exportation of the Household Model has slowed, and many analysts maintain HSBC is looking for friendly countries and developing nations where such tactics may be used.