Bankwest refunds $5m worth of interest

Bankwest Branch and ATM in the Queen Street mall Brisbane. Pic Jono Searle.

BANKWEST has refunded more than $4.9 million in mortgage interest payments after overcharging about 10,800 offset account customers for almost a decade.

An offset account is a savings or transaction account that, when linked to a home loan, offsets the balance of the loan account, reducing the interest payable.

If accounts are not properly linked, the customer would be charged interest on the full loan amount where a discount should be applied.

The lender, which is owned by the Commonwealth Bank, alerted ASIC to a self-discovered failure to link customers’ offset accounts to home loans between 2007 and June 2016.

The Australian Securities and Investments Commission said Bankwest looked into its systems following breaches by another bank.

Last year, Westpac refunded customers $20 million in foreign transaction fees it should not have charged, while ANZ began refunding $28.8 million to more than 390,000 accounts after it failed to disclose when some fee payment fees would apply.

In late 2015, the Commonwealth Bank — the nation’s largest — promised to hand back $80 million to about 216,000 customers after discovering it had failed to apply fee waivers and other benefits to which they were entitled.

It came after similar breaches by ANZ, the Commonwealth Bank, NAB and Macquarie Investment Management in the same year.

“It is critical that licensees ensure that their systems work properly so that promises made to customers about their bank accounts are kept,” ASIC deputy chairman Peter Kell said in a statement on Thursday.

“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 retail executive Andrew Whitechurch said the lender became aware of the issue in March 2014 and had been working on resolving it since, keeping ASIC informed on its progress.

Mr Whitechurch said Bankwest had now updated its systems and processes to prevent a repeat.

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