Customer not told break fee valid for days only

Categories:
Early repayment charges
Summary:
Jamie wanted to refinance his home loan with another bank. He had a fixed rate loan and realised he might have to pay an early repayment charge.

Jamie asked the bank for an estimate of the charge and was quoted $8,000. However, the bank calculated the estimate incorrectly, and when Jamie broke his loan six weeks later, he was charged $17,000.

The bank offered $750 as compensation for stress and inconvenience. It admitted the quote was incorrect, but said quotes were valid only for a few days. Therefore, whether correct or incorrect, the quote would have been invalid. It said Jamie should have sought a fresh quote before breaking the loan. Jamie was unhappy with this response and complained to us.

Our investigation

We concluded Jamie had not been made aware the quote was applicable for only a short time. Jamie had also asked the bank if the quote was still the same on numerous occasions in the weeks before his loan was refinanced. Each time, the original quote was confirmed.

In response, the bank offered to refund Jamie $8,600 and make a goodwill payment of $500 to recognise stress and inconvenience caused.

Outcome

Jamie accepted the offer. 

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