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Friday 10 December 2010

10-267AD ASIC works with the Rock Building Society to correct charging errors

ASIC has raised concerns with The Rock Building Society Limited (The Rock) about charging errors on certain accounts.

This included the incorrect charging of fees on some fee-free accounts, incorrect charging of interest on certain loan accounts and the incorrect charging of default fees in relation to customer repayments made on some loan accounts.

As a result of ASIC enquiries, The Rock has agreed to implement improved compliance systems.

The Rock has co-operated fully with ASIC’s inquiries and has completed an external review of its account management systems. The review and an internal audit conducted by The Rock, found the following errors had occurred between November 2009 to November 2010:

  • approximately 1,800 ‘Under 18’ deposit accounts and deposit accounts held on trust for the benefit of a child under the age of 18 years had been incorrectly charged monthly account keeping fees of approximately $52,000 in total;
  • approximately 3,550 loan accounts had been overcharged interest of approximately $16,600 in total; and
  • approximately 1,620 loan accounts had been charged default fees of approximately $91,000 in total, in circumstances where the fee was not warranted.

The Rock is giving refunds and/or interest adjustments to affected deposit and loan accounts. In the case of deposit accounts, The Rock has contacted affected customers and has given a refund of the incorrectly charged monthly account keeping fee. Customers who were identified as having incorrect interest charges or default fees applied to their loan accounts will receive or have received an interest adjustment or refund, either electronically for open accounts or via cheque for those customers who have closed their accounts.

The Rock will implement a range of measures to improve procedures for monitoring compliance with financial services laws, including:

  • adopting revised procedures for identifying and dealing with potential breaches of financial services laws, including reporting any significant breaches to ASIC;
  • adopting new policies for complaints handling; and
  • implementing new training programs for staff in relation to compliance policies.

ASIC will continue to monitor The Rock’s implementation of these measures and is satisfied with the steps taken to date in relation to these issues.

Any customers who believe they may have been affected by these errors and have not received appropriate reimbursement should in the first instance contact The Rock’s Customer Contact Centre on 1800 806 645.