Thousands Overcharged: NZ FMA Warns Kiwibank Over Joint Account Fee Waiver Failures

The Financial Markets Authority (FMA) of New Zealand has issued a formal warning to Kiwibank for breaching fair dealing provisions under the Financial Markets Conduct Act (FMC Act), after failing to apply promised fee waivers to thousands of joint account customers.

Between at least 2011 and 2024, Kiwibank charged account fees on joint accounts where the secondary account holder qualified for age-based fee waivers—under 18/19 or over 65—while the primary holder did not, despite representations in the bank’s Fees and Limits brochures dating back to 2005.

Kiwibank was first alerted to the issue following a customer complaint in June 2023, and a more widespread issue was later flagged internally in December 2023. Kiwibank self-reported the breach to the FMA in August 2024.

An investigation revealed that 8,663 customers were overcharged a total of NZ$912,053.79 between July 2011 to November 2024, with NZ$747,000 affecting 6,400 customers during 10 years after the FMC Act took effect in April 2014. 

Louise Unger, the FMA’s Executive Director for Response and Enforcement, encouraged customers to speak up if they spot unexpected charges. “The responsibility is on financial service providers to clearly and accurately communicate their fees, as well as ensure that they charge fees in line with what they have promised,” said Unger.

The FMA emphasized that the warning aims to reinforce fair dealing standards and promote confidence and informed participation for investors in New Zealand’s financial markets.

In a separate regulatory action to protect investors this March, the FMA charged former financial adviser David McEwen for breaching a stop order by continuing to contact potential investors.