BNZ has been fined $2.6 million after admitting it calculated interest on some non-profit accounts using the wrong method for nine years, underpaid 23,103 customers by $5.39m, and has now repaid the full amount plus interest.
Bank of New Zealand has been fined $2.6 million by the Financial Markets Authority after admitting it misled customers about how interest was calculated on some non-profit accounts over a nine-year period, as RNZ reported.
The bank told customers interest on their accounts would be calculated daily, but actually used the lowest monthly balance to compute returns — a method that resulted in customers receiving less than they were owed. The error affected 23,103 customers and ran from December 2014 to February 2024.
BNZ self-reported the issue to the FMA and has since paid affected customers the correct interest plus interest on those amounts, totalling $5.44 million. The bank also stopped offering the accounts in February 2025 and moved existing customers to new products.
"Financial institutions must ensure their terms and customer communications are accurate and reflect how products work in practice," FMA head of enforcement Margot Gatland said. "In this case, BNZ's representations about how interest was calculated were inconsistent with the actual approach taken, leading to customer harm."
The fine size reflects BNZ's cooperation and self-reporting, as well as steps it took to remediate the problem. Beyond the repayment, BNZ updated its account terms and engaged with the FMA throughout the investigation.
What non-profit accounts are
Non-profit accounts are typically offered by banks to charities, clubs, societies, and other organisations that do not operate for profit. They generally carry different interest rate structures than standard savings accounts, often with higher rates reflecting the tax-exempt status of qualifying organisations.
The core issue in this case was a gap between what BNZ's product documentation said — daily interest calculation — and what its systems actually did. That discrepancy persisted for nearly a decade before being identified and corrected.
Scam complaints rising separately
The BNZ case follows a separate warning from Banking Ombudsman Nicola Sladden that scam complaints rose 18 percent in the first quarter of 2026 — the first increase since late 2024. In one case investigated by her office, a woman lost $16,700 after entering banking security codes on a fake marketplace link sent by scammers, as reported by RNZ.
Sladden said bank security notifications are there to protect customers and that reading them fully before acting could mean the difference between keeping and losing money. The Banking Ombudsman scheme handles complaints from customers who cannot resolve disputes directly with their bank.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.