2016 - 2017
Mr G had a savings account that would earn bonus interest if he deposited funds but didn’t withdraw any funds during the month. Failing that, he would get only the base interest rate. Mr G usually met the criteria for bonus interest. However, he would sometimes receive bonus interest, and sometimes not. When he queried this, the bank gave an explanation of the interest calculation he could not understand. Mr G said he couldn’t understand the explanation, and was given a different explanation. Again, he could make no sense of it, and out of frustration complained to us.
We looked at Mr G’s statements and found that none of the calculations could explain the interest he had earned. We sought more details from the bank so as to work out precisely how interest was calculated and why Mr G sometimes earned bonus interest and sometimes not.
We learned that the bank’s system calculated the base interest and bonus interest separately, starting with the base interest. On months where Mr G earned base interest of one cent or more and met the criteria, he would also get the bonus interest. On months where Mr G’s account balance was low and he did not get at least one cent in base interest, the system, wrongly, did not go on to calculate the bonus interest.
Nothing in the terms and conditions said bonus interest was payable only if a customer received at least one cent in base interest. The bank promptly paid Mr G the lost interest and offered him $200 compensation in recognition of the significant efforts he had gone to resolve the matter. Mr G accepted the bank’s offer.
We were concerned the bank hadn’t been able to explain how it calculated interest and the bank said the lessons from the case would be shared to prevent poor explanations in future. The bank also undertook to identify the extent of the error and put it right for any other customers who might have been affected.