Wellington - American Express was fined a total of 250,000 New Zealand dollars (about 187,500 US dollars) plus costs in the Auckland District Court Thursday after pleading guilty to five charges of breaching the Fair Trading Act. The company admitted failing to disclose currency conversion fees to cardholders and agreed to pay 1.3 million New Zealand dollars in compensation.
It was the ninth financial institution to plead guilty on similar charges brought by New Zealand's watchdog Commerce Commission, which said it had obtained more than 24 million New Zealand dollars in compensation to cardholders.
"This has been a landmark investigation which has sent a very strong message to the banking industry that banks must not be misleading about the existence and extent of fees," said commission chairwoman Paula Rebstock.
"It has resulted in changes to the way banks and credit card companies disclose that information."
She said the charges resulted in refunds of fees paid by many thousands of credit card users.
The last case related to American Express credit card and charge card transactions between June 2002 and August 2004, when customers who used their cards overseas were charged a 2 per cent fee for each currency conversion which was not adequately declared by the company.
The commission previously prosecuted ANZ National Bank, Bank of New Zealand, Westpac, Kiwibank, Auckland Savings Bank, Trustee Savings Bank, Warehouse Financial Services and Diners Club for inadequate disclosure of currency conversion fees.
