The High Court has ordered the Co-operative Bank to pay a $2.482 million penalty for breaching consumer credit laws by charging customers unreasonable fees across a range of lending products.
The penalty follows a settlement agreement between the bank and the Commerce Commission, with the bank admitting breaches of the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
The Commerce Commission investigation began after the Co-operative Bank self-reported concerns about its fees in December 2021, following an internal review. Civil proceedings were later filed in the High Court in November 2025.
Commerce Commission director of credit Sarah Bartlett said the bank has since remediated 48,249 customers, returning approximately $7.2 million in overcharged fees, including use of money compensation. Customers were remediated back to June 2015.
In her judgment, Justice Victoria Heine said the circumstances behind the breaches varied between fees, but pointed to deeper systemic issues.
"The breaches suggest that there was a fundamental failure within Co operative at that time to appreciate what was needed to comply with the fees provisions," she said.
Justice Heine added the penalty was not "merely the cost of doing business" and was sufficient to deter other lenders from non compliance.
The bank was found to have charged 12 unreasonable fees across its home loan and personal lending products, including establishment fees, overdraft facility fees and early repayment fees, largely between June 2015 and November 2021.
Co-operative Bank Chief Executive Mark Wilkshire apologised to affected customers and said the bank had taken responsibility for the failures.
"We apologise to all impacted customers," Wilkshire said.
"While it's disappointing that we didn't get it right the first time, we own our mistakes. We identified the issue ourselves, reported it to the Commerce Commission, and proactively remediated customers."
Wilkshire said the issue had been disclosed previously to customer owners through annual reports and at annual general meetings.
The bank said an allowance for both the penalty and customer remediation was made in the 2025 financial year, and the payments were not expected to impact its financial results for the year ending March 31, 2026.
Bartlett said the case underscored the importance of strong compliance systems across the banking sector.
"Investing in compliance and rigorously auditing processes and controls is a crucial step towards avoiding an investigation, court action and a hefty penalty," she said.
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