AUSTRALIA’S finance industry watchdog has a timely warning for customers to check mortgage statements after more than 1,000 customers were overcharged in a single bank.
The Australian Securities and Investments Commission (ASIC), which is the country’s corporate, markets and financial services regulator, said a single customer complaint has uncovered a broader systemic issue at the bank in question.
That saw Tasmanian bank MyState refund more than $230,000 in overcharged fees and interest to 1,040 of its customers with mortgage offset accounts.
ASIC deputy chair Peter Kell said banks needed to ensure that their products delivered the benefits that they promoted.
“This is another example of a single customer complaint revealing a systemic issue, and we are pleased that MyState has taken the appropriate action in response.”
It was MyState that reported the matter to ASIC.
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An ASIC statement said the problem occurred because of errors in MyState’s manual administration processes which included failure to link loans and offset accounts, and failures to deal with offset accounts when loans were switched or discharged.
Some “did not have their offset accounts linked to their mortgages – meaning that they were overcharged interest” while others “were charged ‘offset account’ fees after their loan had been discharged or changed to a kind that could not be linked to an offset account”.
“MyState has worked with ASIC to refund customers and improve its internal processes, including by ensuring employees have appropriate account administration training.”
MyState, a wholly owned subsidiary of MyState Limited, a national diversified financial services group headquartered in Tasmania, discovered the breach when a customer enquired about their accounts being linked. When MyState reviewed accounts that were created in a similar manner it found customers with loans and unlinked offset accounts, customers with offset accounts but no loans, and customers with offset accounts together with ineligible loan products.