The bank said it had not yet restructured her loan but would do so immediately. However, it did not ask which accounts she wanted offset against the floating loan, and linked only her main savings account. The bank credited the interest rate adjustment to her account but did not explain how it calculated the adjustment.

A few weeks later, Catherine realised only one account was offset against the floating loan, and called the bank to ask it to link to other accounts. She also asked to increase her repayments. The bank sent her an email saying it had increased her repayments. However, it had not. Catherine also asked for information about how the interest adjustment was calculated, and the bank said several times it would provide this information but never did. The bank made a further interest adjustment to reflect the fact it had not linked all the accounts to the offset structure.

 Catherine complained that the bank's administrative errors meant her home loan balance was about $3,000 higher than it would have been if the bank had increased the loan repayments when she asked. The errors had also caused her significant inconvenience. The bank said she had suffered no financial loss because her funds had sat in her bank account rather than being used to repay the loan. It offered to transfer the funds from her account and adjust the interest rate once more, as well as give her compensation of $1,200 in recognition of the poor service.

Our investigation

We found the bank had failed Catherine in numerous ways. It had not asked what accounts she wanted linked and had not increased her repayments when asked. It had also made  numerous promises to provide responses or information and broken those promises.

We did not consider Catherine was $3,000 worse off as a result of the bank’s administrative errors, although we did consider it likely she had paid more interest than she would have if the repayments had been set higher. We also considered the bank should have taken a broader view of Catherine’s financial circumstances and compared her current position with where she would have been if it had carried out the restructure properly. The bank reviewed its offer and increased the amount to $5,400.

Outcome

Catherine accepted the bank's offer.

Learn more about offset mortgages here.