Australia and New Zealand Banking Group (ANZ) has signed a settlement deal with Commerce Commission to pay NZ$29.4m ($18.4m) to customers affected by loan calculator issue.

The bank identified a coding error in its loan payment calculator between May 2015 and 2016.

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Customers have been charged incorrect interest amounts on their loans due to the miscalculations that arose from the error.

The bank admitted that it failed to take necessary care required of a responsible lender when it provided loan variation information to more than 100,000 customers.

The bank has already paid nearly NZ$6m ($3.7m) to affected customers in 2018.

The Commission investigated the error and obtained a further NZD$29.4m ($18.4m) for the affected customers.

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It is said to be the Commission’s largest settlement with a single bank.

Under the terms of the deal, ANZ admitted being responsible for breaching its lending obligations in the high court proceedings.

The Commission is set to seek a high court declaration stating that the bank’s conduct breached the Credit Contracts and Consumer Finance Act (CCCF Act).

Under the act, every lender must exercise the care, diligence and skill of a responsible lender in all initial and subsequent dealings with borrowers.

In May 2018, ANZ confirmed that due to a coding error in its loan calculator, it miscalculated the interest amounts on loans.

The issue affected personal and home loan customers who agreed with the bank to vary their loans.

ANZ had reported the issue to the Commission in 2017.