NAB caught overcharging interest – are you due a refund?

A recent investigation reveals NAB overcharged some of its home loan customers.

NAB caught overcharging interest

A recent investigation revealed that the National Australia Bank (NAB) may have been overcharging some home loan customers for up to seven years.

Following customer complaints, NAB conducted an internal review that found that between April 2010 and August 2017 it had not linked some offset accounts to broker-originated loans. This resulted in those customers overpaying interest on their home loan.

An offset account is a savings or transaction account that is linked to a home loan account. Any money in the offset account reduces the amount of interest payable on the linked home loan. For example, if the outstanding balance on the home loan is $300,000 and there are savings of $50,000 in the offset account, then interest is only payable on the difference ($250,000).

In this case, NAB failed to link some offset accounts to home loan accounts, which meant that money held in those offset accounts did not reduce the interest payable on the home loan accounts. As a result, consumers paid more in interest than was required.

NAB has commenced contacting and refunding affected customers, with $1.7 million allocated to 966 victims so far.

“Consumers should be confident that when they sign up for a home loan they are receiving all of the benefits that are being promoted,” Acting Australian Securities and Investments Commission (ASIC) Chair Peter Kell said.

“Where there are errors there should be timely and appropriate action to ensure that consumers are not any worse off as a result of the mistake.”

NAB has taken steps to prevent a similar error from occurring in the future.

NAB customers who want to check if they have been overcharged interest on their home loan accounts can call the bank on 1800 152 015.

NAB will also remediate customers who had an offset account during the relevant period but had repaid their home loan before 2017.

Are you one of the victims of NAB’s home loan mistake? Have you received your compensation yet? Do you expect more mistakes to be discovered by the banking royal commission?

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    COMMENTS

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    Charlie
    20th Dec 2017
    11:19am
    I complained about something they were doing, just the other day.

    It was pension day and I wanted to make sure the money was in the account, but when I logged in there were some new conditions blocking my path with a "'Do you agree yes/no".

    I didn't want to stop to read new conditions so I selected "no". Then It wouldn't let me view my account till I said "yes"
    Old Geezer
    20th Dec 2017
    11:27am
    Bank will now say you have said you read them so can use them against you.
    Charlie
    20th Dec 2017
    5:47pm
    Well if they were into providing good services and not being bullies they would provide a time frame in which to give your answer about the new conditions, instead of setting up the computer so it blocks access to your account, unless you do things immediately.

    Its like they don't want anyone thinking too much about the new terms and conditions, but just say yes.
    LiveItUp
    20th Dec 2017
    7:38pm
    So you should be able to use the bank without agreeing to their conditions? I don't think so. You don't drive your car without knowing the condition under which you can drive it
    john
    20th Dec 2017
    11:47am
    Beware the Bank from Q, when they bought out a building society about 7 or so years ago, chaos ensued and rip offs occured!
    Rae
    20th Dec 2017
    11:57am
    Are banks making all these serious mistakes because they have sacked people and closed branches and replaced them with computer programmers not up to the task?

    Something is seriously wrong in the banking industry.
    Old Geezer
    20th Dec 2017
    12:07pm
    Did people actually have offset loans or are they now claiming they did? Looks to me like bank is making good as good will.
    Anonymous
    20th Dec 2017
    3:02pm
    Yes, Rae. Bring on the Royal Commission, one with teeth, and enforce its findings.
    Anonymous
    20th Dec 2017
    3:04pm
    You are probably right OG
    The bank is just paying it rather than argue with some u scrupulous customers over a petty issue
    GeorgeM
    21st Dec 2017
    12:00am
    Rae, I believe you are spot-on. Work is outsourced to vendors, sometimes with further sub-contracting, inadequate testing, and overall very poor IT management with imported low-quality managers.
    Of course, the cost-cutting involved in these structures helps the CEOs and other incompetent managers to get fat bonuses!
    Rae
    21st Dec 2017
    8:19am
    Yes George. I was an early computer user back when you had to write programme. During those years problems were caused by programmers unable to see logical consequences well enough or by the use of the wrong type of program. ie setting up a system using word that didn't work well when a data base would have worked more efficiently.
    It was a human problem entirely.
    Spreadsheets are incredibly powerful but only as useful as the knowledge and predictability and analysis skills of the programmers.
    Old Geezer
    20th Dec 2017
    12:04pm
    I had some third party software a few years ago that calculates your interest on loans etc and I can honesty say that I put all my loans through it and there was only cents difference one way or the other. From my experience most computer programs are very accurate and this case looks more like human error to me.
    Anonymous
    21st Dec 2017
    8:09am
    You know very little about software, then, OG. Having worked in the industry for 25 years, I've seen thousands of instances of appalling error. You seem to forget computer programs are written by people. Human error is common in software because the people who write it are human!
    Rae
    21st Dec 2017
    8:24am
    Yes I agree Rainey.

    Great example is the 18 months the space program was held up because the scientists neglected to add the line at the start that informed the Earth was a spheroid.

    Like the huge revenue losses from faults in security of self serve checkouts the banks have overdone the closing of premises and sacking of expertise.

    All this could have been avoided with less haste and greed.

    Either that or they are down right criminals no better than those scamming supermarket checkout machines.
    Rae
    21st Dec 2017
    8:27am
    It would have been sneaky indeed to have deliberately left the offset instructions out of the equation or the data entry and hoped that either it wasn't noticed and knowing you could always blame the machines and claim it was an oversight.

    Love the way oversight works for a bank but not for a customer.
    Old Geezer
    21st Dec 2017
    1:40pm
    Gee Rainey I though computer programs were written by droids. At least that's what we called them when I worked in the industry. Yes Rainey I was once a computer programmer analyst and I helped develop the programs the banks now use. Human error in inputting data was the biggest source of errors we had to overcome by writing programs that were idiot proof. Next time you get yourself in a loop with a program and there is only one way out and you don't want to take just remember some idiot caused that code to be written so there was only one way out.
    Anonymous
    25th Dec 2017
    2:43pm
    No program is ''idiot proof' OG, and vast numbers of programs are written by idiots. Or are written with deliberate errors to generate future income from remedying. The year 2000 issue is a classic example. Millions were made fixing errors that were either deliberately inserted into code, or weren't there at all but were claimed to be there by greedy programmers wanting a quick buck.
    Anonymous
    25th Dec 2017
    2:44pm
    OMG, OG! Now you were once a computer programmer analyst! But you were ''disadvantaged'' and know about ''hardship''. Goodness, your nose must be reaching for miles by now.
    inextratime
    20th Dec 2017
    12:10pm
    The other banking scandal, which seems to have gone away, is late fees. Exorbitant 'fines'' for being a day late paying the account despite the amount outstanding still attracting maximum interest, especially with credit cards is an example of gouging by a section of the business world that is shared by just four players. If every business in the country was able to charge 'late fees' on the late payment of invoices there would be cries of horror from the highest mountains. The issue was raised at one point but seems to have slipped into the too hard basket.
    Rae
    21st Dec 2017
    8:41am
    I don't object to late fees as people need to be paid on time but you are correct in that every late invoice should be treated the same way including banks charged when they are late processing payments into personal accounts.The same late fee should apply for those customers and paid to them by the bank.

    The Government itself is guilty of not paying invoices on time to contractors.

    The worse crime is allowing sovereignty of money creation to go from Treasury into private bank control.

    Many seem happy about cashless banking but fearful of hyperinflation. Kill the zero bound and we could have the first hyper deflation event. That was only discussed today and had blown our little minds.

    The idea was the person who had borrowed bitcoin at $100 a coin to buy a house and now needed $18000 a coin to pay it back.

    We are in dangerous waters indeed now and there is a lot of unknown consequences hiding within the minds that can't see the dangers.
    Old Geezer
    21st Dec 2017
    3:17pm
    Thanks Rae I'll get onto my old computer and see if I can find my bitcoin and sell it in the new year. Should be enough for a very nice holiday.
    Rae
    21st Dec 2017
    4:55pm
    Yes OG I'd certainly be looking hard. Enjoy your planning anyway. I actually love the planning ahead and anticipation very much indeed.

    The last few years have been successful indeed and so why not enjoy the fruits of that labour and smart investing does take work whatever people who don't do it think.
    Old Geezer
    21st Dec 2017
    6:39pm
    Market is getting a little hard to find somewhere to make money now unless you want to play the spec end of the market so I'm getting quite a pile of cash as I take money off the table as the market goes up.
    Nan Norma
    20th Dec 2017
    12:15pm
    I have seen how NAB gave wrong advise that cost a client thousands.
    Old Geezer
    20th Dec 2017
    1:06pm
    No I heard awhile back that a certain organisation was telling people that if they didn't have their interest offset to contact the bank as they were entitled to have it offset whether they ask for it or not.
    Anonymous
    21st Dec 2017
    8:11am
    A NAB financial adviser gave me bad advice. Thankfully, I recognized it was bad and didn't take it, but it cost me $1500. I complained to NAB and they claimed he was ''independent'' and therefore his failure was not their responsibility. He worked in an office in a NAB building, with a NAB sign on the door, handed out NAB business cards and brochures, had a NAB name plaque on his desk, and I was referred to him by my NAB banking manager!!!

    Yes, they DO give wrong advice that costs clients thousands.
    Rae
    21st Dec 2017
    8:45am
    I was forced to sell a house at a loss of 30% due to wrong and deceitful advice from a bank. In business I know many people who lost money due to faulty or misleading bank advice. I won't trust them now and never borrow without funds to pay them out as a back up.

    This cost me $400 a week in income generation going forward.

    Fool me once sort of thing.
    Old Geezer
    21st Dec 2017
    1:46pm
    I've had nothing but good advice from my personal banker at the NAB and the other banks I deal with. They have saved me many thousands of dollars over the years. Nothing better than having a personal banker who understands you to call for personal service.
    Rae
    21st Dec 2017
    5:01pm
    It could be because I'm a female OG. I've had bank loan advisors tell me that I shouldn't do something and have had to go elsewhere for finance and ended up making great profits.

    The deceitful advise was way back at the beginning when I though advisors would be like investors. Boy did I learn they weren't.

    I ended up with a lovely lady banker at NAB and haven't looked back. NAB is my choice of all of them for thoroughness and helpfulness.

    Admittedly the wrong advise was during that very high interest rate period so I may be being a bit harsh. It is nasty losing capital.
    Old Geezer
    21st Dec 2017
    5:46pm
    Most of my personal bankers have been female and we have such an awesome time making finance funny. Yes it is nasty losing capital and I'll admit to losing some at times but that's the nature of such investing. If you can get it right over 80% of the time and trim the loses you will win the investing game.
    Anonymous
    25th Dec 2017
    2:39pm
    I've caught banking managers out doing thoroughly STUPID things. One who was assessing a loan application insisted I couldn't reply because the lease payments due on an EXPIRED lease left me with too little cash to make loan repayments. Because the lease repayments were showing in the previous year's financials, the idiot claimed those financials reflected my repayment ability. Too dumb to read the lease expiry date and recognize that I would have extra profit in the current year because the lease had been paid out.

    Anyone who hasn't experienced a bank stuffing up and causing loss has either done minimal business with banks or is too dumb to detect their errors.
    Anonymous
    25th Dec 2017
    2:40pm
    Of maybe just too dishonest to admit to reality!

    20th Dec 2017
    3:00pm
    Basic Rule: ALL BANKS ARE BASTARDS!

    20th Dec 2017
    3:02pm
    For heavens sake , it’s was a simple me administrative error
    Poor internal controls , fixed now
    Rae
    21st Dec 2017
    8:50am
    I honestly think you could be receiving dividends from your local ice manufacturer and call him sweet as he supplied a need in the community. Just a mistake in his moral fibre, easily forgiven.

    Yes I own bank shares too but the banks are making one stupid mistake over and over and claiming they will fix it when caught out.

    Not good enough for me. Unlike you I've lost Capital due to a banking "mistake" and I for one no longer trust them or accept their worthless apologising.
    Rae
    21st Dec 2017
    5:03pm
    I apologise Raphael. I should not have slammed you like that and am sorry. Have a Great Christmas.
    Annie
    20th Dec 2017
    7:40pm
    Only those customers who used brokers were ripped off. Typical human error by not linking two accounts into an offset plan. Probably because they outsourced all the back office processing to India and errors aplenty happening from then on. Multiple handling overseas and no local branch staff involved who would be able to correct the issues. Brokers are only customer focused until they have received their commission and then they forget about you.
    Rae
    21st Dec 2017
    8:53am
    Good point Annie. This outsourcing requires we all do the due diligence ourselves perhaps as a poorly paid data entry worker in Manila isn't going to.
    Old Geezer
    21st Dec 2017
    1:42pm
    Sounds like the brokers took short cuts to me in order to get more through put and make more money.
    Anonymous
    26th Dec 2017
    8:46am
    Now there's a wild assumption, OG. You really are good at wild assumptions aren't you. Hopeless at validations though, and could never be bothered with investigation. So much easier to pretend knowledge and abuse anyone who presents FACT that doesn't match your bigoted agenda.
    Nan Norma
    21st Dec 2017
    2:05pm
    OLD Geezer. If I said it was white, you'd say it was black. If I said it was black you'd say it was white. The banks are not as honest as they should be, but saying that, very few people are these days.
    Old Geezer
    21st Dec 2017
    3:14pm
    You are right banks are a lot more honest than a lot of people these days.

    I was in Aldi doing a bit of shopping and handed the checkout operator a $20 note and he gave me change of $50. So I said that I had only given him $20 and he was very surprised I even owned up to it. That's the sort of society we now live in.

    I guess that horses for courses in that you see something as white then some others may not see it as white.
    Anonymous
    21st Dec 2017
    4:28pm
    Nan Norma - i think the years may have been unkind to hence , hence your glass is always half empty and everyone else is out to screw you
    Old Geezer
    21st Dec 2017
    5:47pm
    My glass always feels like it overflowing and I should empty a bit out.
    Nan Norma
    21st Dec 2017
    7:56pm
    Raphael, You are right, life has been unkind to me at times, but I'm always optimistic.
    Anonymous
    25th Dec 2017
    2:34pm
    Nan Norma, it sounds to me like you - unlike OG - live in the REAL WORLD and tell the truth about how it is. It's sad that people like OG are so arrogant and egotistical and get their kicks out of putting others down and trying to imply that anything bad that happens is the fault of the victim. Yes, the banks do engage in dishonest and unethical practices. I think the majority of ordinary folk are honest, but sadly there are lots in this world who are not - and big corporations and politicians lead the pack I think.