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A major Australian bank had to rack up millions of dollars after discovering that it had incorrectly billed 40,000 home loan customers.
<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Westpac& nbsp; mortgage lenders receive letters explaining how they will be reimbursed after they have wrongly charged additional interest. "data-reactid =" 23 "> Westpac mortgage customers have received letters explaining how they will be reimbursed after a surcharge charged by mistake.
The problem was identified for the first time in 2017 and about 70% of clients had already been reimbursed.
At that time, Westpac had announced that the repayments would total $ 11 million and explained that the problem was that the mortgage clients owning with a repayment period only relating to the interest had not been converted into repayments of principal and interest at the end of the period.
This meant that customers did not repay the principal, but only the interest.
Clients whose interest period only expired between 2009 and 2016 were primarily affected by the error.
Westpac had already recorded rehabilitation costs of $ 281 million in its annual results last November, but admitted that rehabilitation costs could exceed this amount.
<h2 clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The customers of the mortgage Westpac have nothing to do."data-reactid =" 33 ">The customers of the mortgage Westpac have nothing to do.
<p clbad = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In a statement to Yahoo finances, Will Ranken, General Manager of Westpac Home Ownership, said the affected customers were not going to do anything to get their money back. "Data-reactid =" 34 "> In a press release Yahoo finances, According to Will Ranken, General Manager of Westpac Home Ownership, the concerned customers do not have to do anything to get a refund.
Affected borrowers will receive a check or will be reimbursed through their mortgages.
However, the big bank has also set up a hotline for those concerned.
"Westpac continually reviews its products and services for its customers," said Ranken.
"As part of this transaction, we identified a mortgage processing error that caused clients to only repay interest on their loan instead of being converted into principal and interest repayments at the end. their interest period. Westpac has issued an external press release at the end of 2017 describing this issue.
"Clients who were not early on the repayments were paying excess interest when their home loan did not go into capital and interest at the right time had to be corrected.
"Many of these clients have already been reimbursed and we are working hard to complete this restoration program."
The bank will contact customers who need further badistance, Ranken explaining that the goal is that no customer pays more interest because of the mistake.
The bank has also put in place an automated switching process to prevent customers from getting stuck in repayment plans only longer than expected.
<h2 clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Westpac Home Loan Problems"data-reactid =" 49 ">Westpac Home Loan Problems
Westpac has been in hot water in recent years for its approach to housing loan processing.
In September 2018, the bank agreed to pay a $ 35 million fine after ASIC, its regulator, declared that the bank's automated mortgage appraisal system violated the responsible lending rules.
ASIC claimed that Westpac issued over 10,000 home loans that may not be appropriate.
Westpac used a system called Household Expenditure Measures (HEM) to judge borrower capabilities, rather than individually badessing the cost of living for clients. The HEM is now considered to return a low estimate.
"This result, together with ASIC's responsible lending actions, emphasizes that all lenders must obtain information from borrowers about their financial situation so that they can properly badess the client's ability. to repay the loan, "said the president of ASIC, Mr. Shipson at the time.
"Lenders must then verify the information to make sure of their veracity and then determine if the loan is inadequate for the borrower."
<p clbad = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "However, & nbsp;the Federal Court refused to approve the negotiated penalty,& nbsp; Judge Nye Perram arguing that neither ASIC nor Westpac were able to determine whether housing loans were in fact in violation of the law. "data-reactid =" 56 "> However, the Federal Court refused to approve the negotiated penalty, Judge Nye Perram, arguing that neither ASIC nor Westpac had been able to determine whether housing loans were actually in violation of the law.
<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Westpac is also the subject of a clbad action involving potentially thousands of borrowers."data-reactid =" 57 "> Westpac is also the subject of a clbad action involving potentially thousands of borrowers.
The clbad action lawsuit, filed by Maurice Blackburn, is about the HEM system with a litigator saying thousands of home loans have been affected.
"Westpac is required to comply with strict obligations specifically designed to protect consumers from irresponsible lending and the risk of financial hardship," said Maurice Blackburn's chief attorney, Ben Slade, in February of this year.
"This case will seek to prove that Westpac has breached these obligations and that this omission has caused substantial losses to many consumers."
<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Make your money work with Yahoo Finance's daily newsletter. S & # 39; register right here and stay up to date on the latest news in money, news and technology."data-reactid =" 61 ">Make your money work with Yahoo Finance's daily newsletter. S & # 39; register right here and stay up to date on the latest news in money, news and technology.
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