ANZ Refunds 235,000 Home Loan Customers $70 Million for Interest Repayment Overcharge

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By Vittorio Hernandez | January 30, 2014 10:45 AM EST

REUTERS/Daniel Munoz
A customer arrives at an Australia and New Zealand Banking Group Ltd (ANZ) ATM in central Sydney May 3, 2011. Australia and New Zealand Banking Group reported a 23 percent rise in first-half underlying profit to a record, as bad-debt charges fell, but warned of slow lending growth ahead as businesses avoid borrowing and households focus on savings. REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS)

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ANZ Bank's image as a bully lender to some customers may be softened since the bank is now refunding 235,000 home loan customers a total of $70 million which represents overcharge for interest repayments. That would average about $300 per customers.

The bank is informing its clients through letters of the errors in computation of interest repayments that, in some instances, go all the way back to 2003. The mistake was attributed to agreed discounts or offset accounts not being linked to the customer's mortgage accounts.

ANZ said sorry to its clients for the human error and held a review of all its offset accounts beginning 2003, Breakfree accounts since 2006 and 2.4 million mortgage accounts since 2011.

A bank spokesman said it has started refunding customers immediately, with some receiving a compensation amount, and all payments are expected to be completed within the next 6 weeks.

The bank, which informed the Australian Securities and Investments Commission of the process, said the refunds will not impact its results.

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(Photo: REUTERS/Daniel Munoz / )
A customer arrives at an Australia and New Zealand Banking Group Ltd (ANZ) ATM in central Sydney May 3, 2011. Australia and New Zealand Banking Group reported a 23 percent rise in first-half underlying profit to a record, as bad-debt charges fell, but warned of slow lending growth ahead as businesses avoid borrowing and households focus on savings. REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS)
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