A year later, Rosamaria learned that the funds in her savings accounts were no longer offsetting the amount owing on her home loan. She made the discovery after depositing more than $100,000 in her savings account. This should have entirely offset her loan balance but didn’t because the bank continued to charge her interest. She complained to the bank, but it said it didn’t offer offset home loans with fixed interest rates. Rosamaria said no one at the bank told her this fact. The bank was unmoved so she complained to us.

Our investigation

We found the bank should have been clearer in explaining the consequences of switching to a fixed rate loan. It never warned Rosamaria that the bank would not offset her savings if she moved off a floating rate. The bank’s only reference to the loss of this benefit was very oblique. We were confident Rosamaria would not have made the switch if she had been properly informed about the impact of the move because her interest costs would have been significantly lower if she had stayed put.

We did, however, consider Rosamaria should have picked up the mistake sooner. She was receiving monthly loan statements and should reasonably have noticed she was paying more interest than she had expected. She therefore had some responsibility for the extra interest costs she incurred.

Outcome

The bank offered to pay Rosamaria $4,500 compensation, which covered most of her extra  interest, and she accepted the offer.