NAB mops up interest overcharge headache
A special internal review set up by National Australia Bank to investigate overcharging of home loan borrowers took six months to fix the problem, according to disclosures made yesterday by ASIC and the bank.After receiving complaints from borrowers who took out loans through mortgage brokers, NAB established a review in February to assess whether the bank had properly linked offset accounts to home loans.It was not until August that the bank managed to get on top of the issue, which by then meant that it had overcharged 966 customers A$1.7 million on interest payments.ASIC said in a statement that NAB has engaged PwC to review its approach to remediation and to ensure its compliance systems would prevent a similar error from occurring again.The remediation is the latest in a wave of mop-ups across the banking industry ahead of the royal commission into the financial sector early next year.Earlier this month Westpac paid $11 million in compensation to 13,000 mortgage borrowers who were overcharged on interest only loans.