Press conference was held on 29 July 2026.

Sarah Court: Well, good morning. Thank you for being here. And before we begin, let me acknowledge that we are on the lands of the Gadigal people of the Eora Nation.

Mortgage offset accounts are an important tool for many Australians in the management of their financial affairs. More than three million Australian households have a mortgage, and banks hold more than $350 billion in offset accounts. When they operate as promised, offset accounts offer significant interest savings. When banks fail to properly link offset accounts, customers are deprived of that promise.

Today, ASIC releases a report which has found significant failures in the management by banks of offset accounts. We have found that banks are failing to deliver interest savings to many of their customers, costing millions of dollars a year in extra interest.

Reports to ASIC over a two-year period show banks have already paid more than $55 million in customer compensation for offset account failures. These failures have impacted more than 250,000 customers. More compensation is expected as banks continue to examine the extent of the problem.

ASIC reviewed the practices of eight banks that represented more than 70% of Australia’s $2.5 trillion home loan market, and we reviewed data for thousands of unique loans. We found inconsistencies in the offset account practices across all eight banks, and we identified four key concerns.

First, the banks struggled to readily identify if or when their customers had requested an offset account, at times having to resort to manual searches. This makes it difficult for a bank to know whether they are delivering on their promises to customers.

Second, some banks had difficulty detecting offset account failures, relying on customer complaints or the process of responding to ASIC’s data requests to identify the issues. This makes it difficult for those banks to say with any confidence that they are promptly rectifying issues and compensating customers for interest savings not passed on.

Third, we found some banks failed to compensate customers and were slow to fix issues. And finally, we have found that some customers have no way to confirm whether or not their offset account has been set up as requested, is linked to the right home loan, and is saving them interest.

Disappointingly, it’s clear that the banks we surveyed may themselves not know the full extent of these issues because of inadequate information gathering, inadequate record keeping, and poor processes to assure them that they are delivering on their promises. The amount of the potential losses to customers at this stage is completely unknown.

Now, these are basic products and we are concerned some banks are not getting the basics right when it comes to offset accounts. For many customers, these accounts help reduce interest costs and pay down home loans faster. And in many cases, customers pay more for these accounts, for these features, through higher interest rates, account fees, or both. Customers trust their banks to deliver these benefits, and we think many customers have been let down.

In one case, a customer paid more than $3,500 in extra interest in just over one month when their offset account was incorrectly delinked by their bank. In another example, two customers paid more than $17,000 in additional interest after the bank failed to inform their broker that the offset account needed to be relinked following refinancing.

Now, many of these failures went undetected until ASIC started our work. And despite the thousands of loans we’ve reviewed, the high volume of customer complaints, the millions of dollars in compensation already paid and continuing remediation programs underway, the banks themselves in the course of our review reported very few offset account failures to us. We think this is emblematic of the problem.

Offset accounts are important to customers. They come at a cost. We think banks need to strengthen their practices in this area, fix the weaknesses in how offset accounts are set up, linked and managed, and deliver on the promised savings to their customers. We also expect all banks to identify and promptly compensate customers affected by offset failures. We will, of course, continue to monitor how these issues are addressed and will take further regulatory action where it’s appropriate.

Thank you. I’m sure you have some questions.

Questions

Question: Is this a systemic practice of banks ripping customers off, or is it an administrative issue in areas like that needs to be rectified more so?

Sarah Court: Yeah, I’m not sure I’d describe it as banks ripping customers off. I think I’d characterise it as a systemic issue that is widespread across the sector and that it is clear that many, many customers are not getting the interest savings that they were promised.

Now, there are a variety of reasons for that. But what we were really disappointed or somewhat surprised to find, is that a lot of the record-keeping within the banks themselves is such that it’s almost impossible to tell if someone’s requested an offset account in the first place. You know, having to resort to manual processes and linking this section of a bank with this section of the bank. Now, our concern is it should not be up to customers to find these issues. This should be something that the banks are able to detect remediate and fix themselves.

Question: Can I ask you two questions? First of all, if records are lean, in the sense they don’t know if customers ask for an offset, what’s to stop 3.3 million homeowners today talking to their bank saying, I had offset, or at least I thought I had offset? Has this opened a can of worms for the bank?

Sarah Court: Yeah, well, thank you for the question. One of the things that we are doing in this report is encouraging customers to have a look at this right now, today, while it is fresh in your mind. So, firstly, customers shouldn’t have to do this. Customers should be able to rely on the banks doing it for them. But we’re encouraging people to have a look.

You can have a look through your banking app. Now, some banks make it relatively easy to check whether or not there is an offset account and whether it’s been linked. But in other banks, it’s very difficult to do that. Their online systems are just not sufficient to enable customers to do that. So we’re saying, firstly, check online, check your banking app. But if that gives you no answers, while it is irritating to spend hours on the phone to your bank, we think it is worth it in these circumstances because of the potential interest-saving costs to get on the phone and ask your bank to guarantee and confirm for you that you’ve got an offset account that’s been set up as you requested, that it’s linked to the right loan, and that you’re getting those interest savings.

Question: And my final question is, offset values included not linking, and linking to the wrong home loan.

Sarah Court: Indeed.

Question: Technically, could my offset be paying your home loan?

Sarah Court: Yes, I think, to be fair, when we say linked to the wrong loan, it’s probably the same customer has more than one loan.

Question: But it’s quite possible that –

Sarah Court: But, look, I’m speculating there. And, as I say, I think the real thing that has taken us by surprise is just the lack of readily available information here. So, as I say, we had expected that the banks would be able to deal with this issue quickly and say, yep, here’s a list, here’s our central register or record of all our customers that have required or requested offset accounts, and here’s when it was given and here’s where it’s linked. We could not get that information. And that, for us, is really sort of symptomatic of this bigger problem.

Question: Sarah, in your view, the eight banks that were subject to this report, have they moved quickly enough? And just a second point as well, is ASIC going to be commencing any kind of enforcement action against any of these eight banks?

Sarah Court: Yeah. So, in relation to the banks that we’ve surveyed, I do want to acknowledge that a number of them have moved relatively quickly to look more closely at their processes and to improve. Now, not all of them, but many of them have, and we recognise that. And, in part, I think that’s why we are seeing continuing reports to us and continuing remediation. So even since our survey or our review period finished, we know that there are millions of dollars more in compensation being paid back, remediated to customers, and that’s because the banks are continuing to detect issues.

In relation to enforcement or other action, I think my message today is we are staying vigilant in relation to this. We think it’s a really significant issue. We’ll be monitoring the sector on a continuing basis. We’ll be providing feedback to all of those banks in our review. And if we’re not satisfied with the response, then, of course, we’ll consider further action.

Question: You looked at eight institutions, including three of the big four; NAB was the missing big four name.

Sarah Court: Yes.

Question: Why were they excluded or left out of this review?

Sarah Court: Yes, look, when we do these surveillances, we give a lot of consideration to which particular entities do we include. So we don’t always include every one of the majors, for example. What we wanted to do here was to really make sure that we covered the field. So we wanted to have some big banks, we wanted to have some mid-tier banks and some smaller ones. So there’s nothing particular to read into that. We just decided that, given that those eight that we selected covered a good 70% of the home loan market, we thought that that centre was a good proxy, if you like, for the whole market.

Question: Are you confident this would put NAB on notice as well?

Sarah Court: Indeed. So, as I say, the fact that we’ve selected eight out of all of the home loan providers across the market, really shouldn’t send any signal specifically to those eight. I mean, we do this kind of work because we are sending a signal more broadly to the sector; you are on notice that this is an issue. There’s no reason to think that NAB or any of the others that we didn’t survey are any better in their performance than those that we’ve chosen. So we have to make these decisions. We’ve carefully selected those people. And, as I say, these findings, and I think we say in our report, they really need to be considered by the sector as a whole.

Question: Just a final one from me. There were some kind of egregious case examples in that report, including institutions who identified these problems previously but did nothing to fix them or compensate customers until ASIC got involved. Are you concerned there’s complacency, or perhaps arrogance that’s crept into the sector?

Sarah Court: I wouldn’t call it arrogance yet. I would say I am frequently surprised when issues are identified, and if I could talk more broadly, so not just about this report, but, as you say, there was one example of this in the report, when issues are identified within big financial institutions by someone that says, we’ve got a problem here, in this case, they said, we’ve got a problem here with our offset account linkages, establishment and linkages, and it doesn’t get jumped on and remedied. That is an issue we see consistently across financial institutions. It’s something that we view very dimly. And, yes, we do have concerns that if these kind of compliance failures are identified, clearly they should be escalated quickly and dealt with.

Is there an example in the review of banks ever overcompensating customers in their offset accounts, or is it always going the other way where customers are missing out? I think it’s fair to say we did not find any examples of overcompensation by the banks. Any other questions? Sarah, can you give us a sense of the scale of borrowers that may be affected by this offset issue? Because the ABA says that it’s well under 1% for offset account holders.

Question: Was there an example in the review of banks ever over-compensating customers in their offset accounts, or is it always going the other way where a customer’s missing out.

Sarah Court: I think it’s fair to say we did not find any examples of over-compensation by the banks. Any other questions?

Question: Sarah, can you give us a sense of the scale of borrowers that may be affected by this offset issue? Because the ABA says that it’s well under 1% of all offset account holders.

Sarah Court: Yeah, so the scale that we’ve seen, and as I say, because of the challenges with the information and data that’s available, it is quite difficult to know how big the scale of this problem is. What we do know, what the objective information and data that we have, is that more than $55 million has already been paid back to customers for these failures. So that’s the first point.

We know that that covers at least around 264,000 individual people that have had refunds, so that’s a fairly large number. And we know that as the banks are continuing to review and look at their systems, that more and more are emerging. So I think we’ve had another $3 or $4 million paid just since ASIC’s finished our review. So this is a significant issue that has impacted thousands, more than 250,000 Australians, so we think it’s an important one for banks to sit up and deal with.

Question: Banks have continually to fail customers. ASIC has come in a few times now with the high fees, low-income accounts of about $93 million. There are savings accounts with the traps of headline rates and so on and so on. If they’re getting this wrong, what else are they getting wrong? I mean, what does this do for consumer confidence? Is my interest in my savings account being calculated correctly? Do consumers need to check everything now?

Sarah Court: Yeah, well, we are concerned that banks, on many occasions, get the basics wrong, and that is something that we have been talking about at ASIC for a long time. Those were the kind of failures and issues that we saw in the Financial Services Royal Commission. We are in court against one of the big four banks on a very frequent basis, often about simple things, like getting interest rate calculations incorrect, for example, not processing hardship applications within the time required by the statute. Here we are again in relation to offset accounts. So we are continuing to call these things out. We’re going to continue to do that, and it’s a clear message to the banks about fixing these basics and putting their customers first.

Question: Is there anything else on your radar now that you’re turning your attention to?

Sarah Court: Well, that would be telling.

Question: Sarah, just a final one from me. The review didn’t assess how banks calculated remediation interest. I’ve spoken to an affected customer, and her biggest issue was around the lack of transparency around how the compensation was calculated. She basically received a letter with a lump sum, and I’m just wondering if ASIC would be looking at examining that part of the situation as well.

Sarah Court: No, well, that’s very interesting, and it goes, doesn’t it, to this issue of trust, and that it’s very difficult. I mean, one of the things about these kind of offset account failures is it’s very difficult for a customer to work out for themselves how much less interest they should have paid than they have paid as a result of these failures.

Now, we have not gone the next step to look at how is the compensation and remediation being worked out, but we would encourage every customer, if they’ve received correspondence that is just a lump sum and they think, well, that doesn’t look right, that figure does not look right, they should take it up with their bank. The banks will be expecting customers, as a result of ASIC’s work, to be coming to them, asking them questions, and we very much encourage people to do that.

Question: Do you think the banks have forgotten the lessons of the Royal Commission?

Sarah Court: Let me put it this way, David. We at ASIC have not forgotten the lessons of the Royal Commission, and that is why we have made, as an enduring enforcement priority, systemic failures by large financial institutions where they cause customer harm.

Now, this is not an enforcement issue at the moment, but we have front and centre of our minds making sure that big financial institutions put their customers first, and we are going to continue doing these kind of surveillances and holding them to account.

Question: Just bank remediation. I mean, you haven’t secured any fines with banks other than ANZ last year. Is there not a better way to send a message to these banks about dealing with these failures?

Sarah Court: Well, as I said, there may well be more to come here, and we have taken multiple actions against multiple banks. The ANZ is one example of many, and I think we’re in complete agreement with you that a strong enforcement stance to banks, taking them to court and getting penalties imposed, is of course a way to send a message.

Question: Do you expect bankers to lose their bonuses over this?

Sarah Court: I’m making no comment on banker bonuses or other. As I say, our job is to do this work. It’s to do the surveillance. It’s to call out the issues. It’s to look at the objective data and the objective facts and to put this information out to people to say, we think this is a systemic, serious issue and we are encouraging, on the one hand, the banks to look closely at this and to remediate promptly, and secondly, we’re talking to consumers to say, get onto your banking app, get onto your website, get onto your bank and make sure that you are getting the promises that you have been promised.