How you could be owed BIG money: Major Australian bank is ordered to pay tens of millions of dollars to its customers who were hit with incorrect charges
- A processing error has left 40,000 Westpac customers paying extra interest
- It has also affected the bank's subsidises St George and Bank of Melbourne
- The error failed to convert interest-only loans to principal and interest loans
- It primarily impacted people with interest-only periods between 2009 and 2016
A major Australian bank has been forced to pay back tens of millions of dollars to its customers after a processing error hit them with excess charges.
The error left 40,000 Westpac customers continuing to make payments on interest- only loans, long after they should have been switched over to principal and interest repayments.
The bank first publicly identified the issue back in 2017 and said it has been working with customers to settle the error, with 70 per cent of the affect customers compensated so far, the Herald Sun reported.
A total of 40,000 customers have paid more interest on the loan than required - and will be compensated either through a cheque or directly into their home loan account.
The error left many Westpac customers continuing to make payments on interest only loans long after the agreed upon period when they should have been switched over to a principal and interest loan
Share this article
However the 30,000 who were ahead on their loan payments will not be compensated as they were not financially affected.
Those with agreed upon interest-only periods between 2009 and 2016 make up most of these customers.
The error, caused by a manual fault in the processing, has also effected some customers at their subsidiary lenders including St George, BankSA and Bank of Melbourne.
A total of 40,000 customers have paid more interest on the loan than required and will be compensated either through a cheque or directly into their home loan account
Although the Westpac customers will be paid back, those affected could be potentially looking at have their loan extended.
That's because their loan was frozen in interest-only payments - therefore blocking them from paying off their debt.
Westpac said it has since conducted a full review.
It will now be automatically switching the interest-only loans to interest and principal loans via a computer program.
Affected Westpac customer are advised to call the Specialist Banking line on 1300 132 925.
Comments 0
Share what you think
No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards.
