National Australia Bank has refunded $1.7 million to almost 1,000 mortgage customers after charging them too much interest because it failed to properly set up their offset accounts.
The Australian Securities and Investments Commission on Tuesday said NAB had refunded 966 home loan customers after the bank’s own review found that between April 2010 and August 2017 it had not linked some offset accounts to loans set up by brokers.
NAB’s failure to link the offset accounts to mortgages meant that money held in the accounts did not reduce the interest payable on the home loans.
The bank reported the issue to ASIC and asked financial services firm PwC to review the remediation approach and to ensure its systems prevent similar errors occurring in the future.
Acting ASIC chair Peter Kell said there should always be timely and appropriate action in the case of errors to ensure that consumers are not worse off as a result of the mistake
“Consumers should be confident that when they sign up for a home loan they are receiving all of the benefits that are being promoted,” Mr Kell said.