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Australia's CBA to refund customers who overpaid home loans
[SYDNEY] The Commonwealth Bank of Australia said on Wednesday it will refund about A$80 million (S$81.6 million) to customers who overpaid their home loans because the bank failed to deliver eligible discounts.
CBA said about 216,000 customers had overpaid fees and interest on two of its mortgage products, some for several years.
The bank discovered the error in 2014 after a customer complaint. It notified the securities regulator and appointed Ernst & Young to carry out an independent review.
The Australian Securities and Investments Commission (ASIC) said human error was to blame for the mistake, while a backup system to detect any problems also failed. "I apologise to customers who have not received the full benefits of their home loan package due to our mistake," Matt Comyn, a retail banking services executive, said in a statement. "We have taken steps to address the root causes of the error, including changes to controls, systems and processes." The average refund per customer is about A$370, which includes interest.
The refund is the latest in a handful of such payouts by Australia's big banks this year.
CBA last month said it would refund A$7.6 million to agribusiness customers who were overcharged. National Australia Bank said in July it would repay about 62,000 customers A$25 million who were wrongly compensated.
In April, Australia and New Zealand Banking Group said it would pay A$30 million to thousands of its own planning clients who paid for advice but did not receive all the services they were promised.