Making amends: Bankwest refunds customers after home loan breach
Article by Mozo
After finding that some customers with offset accounts attached to their home loans were overcharged in interest, Bankwest has recently refunded $4.9 million to around 10,800 customers.
The breach affected customers who signed up for Bankwest home loans between 2007 and June 2016, and occurred when Bankwest “failed to link offset accounts to home loan accounts for some customers... resulting in customers being overcharged interest."
An offset account is a savings or transaction account which is linked to a borrower's home loan. Balances deposited into the account are offset against the borrower's loan amount, reducing the amount of interest they pay.
Used correctly, these accounts can mean significant savings for borrowers, but when left unlinked, as in the case of the Bankwest breach, customers are charged the full amount of interest on their mortgage.
Read more about offset accounts
Bankwest, which is a Western Australian lender taken over by the Commonwealth Bank in 2008, discovered the breach when it launched an internal investigation into its offset accounts. This investigation was prompted by media coverage of ASIC’s work uncovering a similar breach at another bank.
ASIC Deputy Chairman, Peter Kell, said that, “When a problem is identified, licensees not only have an obligation to report the breach, but impacted customers must be returned to the position they would have been in, had the breach not occurred.”
Bankwest reported the breach to ASIC and also updated its systems and processes. Now, new offset accounts will be automatically linked with home loans. It also got in contact with customers who were overcharged to explain the situation and to arrange refunds.
At the same time, big bank NAB has also had to refund $34.7 million to over 220,000 members after they were incorrectly charged for superannuation advice they did not receive, between September 2012 and October 2016. ASIC has also placed additional license conditions on NAB’s superannuation trustee.
NAB also identified 10 insurance claims that were underpaid or declined incorrectly, and has refunded the affected customers a total of $1.8 million.
Looking for a home loan to get you in your dream house quicker? You can do your own research with our mortgage comparison tool, or, get in touch with our home loan negotiator Steve, who can help you negotiate a great deal.