Bank of Queensland to refund 6,000 customers after mortgage offset error
The Bank of Queensland (BoQ) will refund thousands of customers around $12 million after they paid too much interest on their home loans over a number of years.
Mortgage customers were overcharged due to a computer error that resulted in a failure to link Mortgage Offset Accounts (MOA) to some eligible home loan accounts.
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.
“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,” explained ASIC.
“Current estimates are that the error impacted approximately 6,000 customers and total refunds will be in the order of $12 million,” said 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,” said ASIC.
ASIC acknowledged 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, which will take place over the next 10 months.