FMA warns of TSB overcharging on business accounts

Media Release
MR No. 2026 - 42

The Financial Markets Authority – Te Mana Tātai Hokohoko (FMA) has issued a warning about TSB Bank Limited’s (TSB’s) conduct after it charged fees on business cheque transactions that weren’t subject to fees according to its own terms and conditions.

Between 30 November 2017 and 20 November 2023, TSB charged a $0.25 fee on some business cheque transactions that shouldn’t have attracted the fee. The error affected 7,309 customer accounts. TSB has paid back a total of $1.73 million, which covers the fees, related interest and charges, and compensation for the use of that money over time.

TSB changed the wording of its Business Cheque terms and conditions in November 2017. The change was meant to make the fees clearer, but it left out some transactions that the bank’s systems kept charging for. So what customers were told they would be charged and what they were actually charged didn’t match for an extended period.

“Customers should be able to trust that a bank charges them only what its terms and conditions say it will,” said FMA Acting Head of Perimeter and Response, Trish Millward. “TSB’s customers had no practical way to check these fees for themselves, and the overcharging went on for six years. When financial institutions make changes to their terms and conditions, they need to ensure that their systems can deliver those changes to their customers. Financial institutions need to ensure their systems and processes support fair customer outcomes.”

The FMA acknowledged that TSB reported the issue itself, worked constructively with the FMA, and has largely finished reimbursing customers. The warning reflects the extended period of overcharging, the number of customers affected, and delays in reporting the issue to the FMA and paying the refunds.

ENDS

Notes for editors

A public warning is issued under section 9(1)(a)(ii) of the Financial Markets Authority Act 2011.
TSB identified the issue internally in August 2023 and stopped charging the fees on 20 November 2023. It notified the FMA verbally in December 2024 and in writing in February 2025.
Remediation totalled $1,734,800: $1,425,127 in fee refunds, $10,404 in related interest and fees, and $299,269 in compensation for use of money interest.

About the FMA

The Financial Markets Authority – Te Mana Tātai Hokohoko (FMA) is the New Zealand government agency responsible for financial markets regulation. Our purpose is to promote and facilitate the development of fair, efficient and transparent financial markets. For more information visit fma.govt.nz.

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