Westpac To Refund 13,000 Customers After Mortgage Error
Westpac will be forced to compensate 13,000 customers with around $11 million after mortgage processing errors were discovered.
It is believed that interest only variable home loan customers were affected by the errors that led to them being overcharged on interest-only repayments rather than being switched to principal and interest repayments.
The affected customers were also given less time to repay the principal amount of their loans. Westpac discovered the error during an ongoing review.
"At Westpac, we want our customers to have confidence that if we get something wrong, we acknowledge it and we put it right," said George Frazias, Westpac's consumer bank chief executive.
"When we identified this issue, we set about fixing it and understanding the full customer impact.
"We also notified ASIC and worked with them on our response. Our approach is to ensure no owner occupier customer pays more interest over the originally intended loan term as a result of our mistake."
Customers who had a loan with an interest only period that expired between 2009 and 2016 are expected to be predominantly affected.
The error is believed to have occurred within a piece of processing software.
"We apologise unreservedly for the error and have now automated the switching process to ensure it does not happen again," said Frazias.
"Importantly, customers don't need to do anything. We are contacting customers proactively and will provide compensation to anyone who we believe has been financially disadvantaged."
The refunding process is being handled by accounting firm Deloitte and is expected to take 12 months to complete.