National Australia Bank has refunded $1.7 million to 966 home loan customers after it incorrectly set up mortgage offset accounts over a seven-year period.
NAB started an internal review after a number of customers complained they were overpaying interest on their home loans.
he reviews found that between April 2010 and August 2017 it had not linked some offset accounts to broker-originated loans, which meant money in those offset accounts did not reduce the interest payable on the home loan accounts.
Affected customers have been refunded so they are charged only the interest that would have been payable if the mortgage offset account had been set up properly from the start.
Commonwealth Bank’s Bankwest division in February refunded $4.9 million to 10,800 customers for a similar error.
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And the NAB refund comes just days after Westpac said it would repay $11 million to 9400 mortgage holders due to a systems error affecting some loans going back 25 years. The bank failed to switch the owner-occupiers, who had interest-only home loans, to principal and interest mortgages at the end of their interest-only period.
“Consumers should be confident that when they sign up for a home loan they are receiving all of the benefits that are being promoted,” Australian Securities and Investments Commission acting chairman Peter Kell said in a statement on Tuesday.