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13-070MR BoQ to refund customers after system error
Bank of Queensland Ltd (BoQ) will refund customers after a system error resulted in a failure to link Mortgage Offset Accounts (MOA) to some eligible home loan accounts over a number of years.
Current estimates are that the error impacted approximately 6000 customers and total refunds will be in the order of $12 million.
BoQ discovered the problem and reported it to ASIC. BoQ has agreed to appoint an independent expert to review its remediation processes to ensure that:
all affected customers are identified and appropriately compensated, and
BoQ's compliance systems are adequate to prevent a similar error occurring in future.
ASIC Commissioner Peter Kell said: 'One of ASIC's roles is to ensure financial consumers can be confident in the conduct of the financial institutions they deal with. Central to this is ensuring financial services and credit are provided efficiently, honestly and fairly'.
'Where errors do occur, it is important that they are identified as early as possible and appropriately rectified.'
ASIC acknowledges the cooperative approach taken by BoQ in relation to this matter.
BoQ has already compensated some customers and will ensure that the remaining affected customers are contacted.
Customers affected by the error will be advised of their compensation. This will take place over the next 10 months. There is no need to lodge a claim but customers who are concerned and want to discuss the matter can contact BoQ on 1300 557 272.
An offset account is a savings account that is linked to a person's 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 $100,000 and there are savings of $20,000 in the offset account, then interest is only payable on the difference ($80,000).
In this case, BoQ 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, borrowers paid more in interest than they should have done.