ASIC said MyState Bank Limited (MyState), a Tasmanian bank, has refunded more than $230,000 in over-charged interest and fees to more than 1,040 customers with mortgage offset accounts.
Following a customer complaint, and after a review of its accounts, MyState found that some customers:
- Did not have their offset accounts linked to their mortgages – meaning that they were over-charged interest
- Were charged ‘offset account’ fees after their loan had been discharged or changed to a kind that could not be linked to an offset account.
This was due to errors in MyState’s manual administration processes, including failures to link loans and offset accounts, and failures to deal with offset accounts when loans were switched or discharged.
The matter was reported to ASIC by MyState. MyState has worked with ASIC to refund customers and improve its internal processes, including by ensuring employees have appropriate account administration training.
“Banks need to ensure that their products are delivering the benefits that they are promoting,” ASIC Deputy Chair Peter Kell said.
“This is another example of a single customer complaint revealing a systemic issue, and we are pleased that MyState has taken the appropriate action in response.”
MyState has contacted customers who are eligible for a refund. Customers who have questions about their accounts should contact MyState on: 138 001.
Background
MyState is a wholly owned subsidiary of MyState Limited, a national diversified financial services group headquartered in Tasmania.
The breach was detected when a customer enquired about their accounts being linked. MyState conducted a review of accounts set up in a similar manner. MyState found customers with loans and unlinked offset accounts, customers with offset accounts but no loans, and customers with offset accounts together with ineligible loan products.
