New Zealand’s High Court has penalised ASB Bank for failing to apply multipolicy discounts on insurance products.

The bank has been fined $NZ2.1 million ($1.76 million) for fair dealing breaches relating to the insurance and its banking services after it admitted making false and/or misleading representations and refunded $NZ4.7 million ($3.95 million) to 25,000 customers.

Judge Laura O’Gorman said the penalty “needs to be at a level that clearly signals manual processes without adequate quality assurance and proactive problem detection and escalation is unacceptable”.

The Financial Markets Authority took action against ASB in October 2024.

It said misapplication of the multipolicy discounts on insurance arose through errors by staff in a manual process at the point of sale.

Another issue involved staff misinforming customers with caravan and trailer policies that they were eligible for the multipolicy discount when this was not the case.

The FMA acknowledged ASB self-reported the issues.