ANZ Bank will remove access to millions of dollars in loan redraw facilities after identifying about 200,000 accounts with incorrect balances.
The bank is continuing the process of repairing accounts that had already led to the removal of access to $8.7 million in redraw facilities, according to a report by The Australian Financial Review. The process was temporarily halted in response to the bushfires and the COVID-19 pandemic.
ANZ said that an underlying system and manual processing issue inflated the balances of about 20% of its mortgage book, AFR reported. Sarah Stubbings, ANZ’s responsible banking lead and former head of home loans, said that loans deferred due to COVID-19 would not be immediately impacted.
Those whose accounts are affected – mostly mortgage and personal loan customers – are being notified by mail of their correct balance and warned not to overdraw their accounts before an adjustment is made, AFR reported. Stubbings said that ANZ would work with customers who had already spent the excess by mistake, and would refund interest paid when appropriate.
“We are very sensitive to individual customer circumstances, and that’s the reason why we took the actions we did around the time of the brushfires, and subsequently COVID, and we will continue to work with our customers and support them through this,” Stubbings told AFR.
In a letter to customers, ANZ provided affected account holders with a revised redraw balance and the expected date of the balance change.
“It is possible that if you redraw amounts greater than the estimated revised redraw balance, your loan may go into arrears and ANZ may require any amounts drawn above this figure to be repaid,” the letter said.
The average ANZ customer affected by the adjustment will see a $264 reduction in their redraw balance, according to AFR. However, 131 customers will see adjustments of more than $10,000 each.
ANZ said that it has refunded $11.4 million in interest payment to customers who drew on the excess funds. Affected customers have been refunded $124 in interest payments on average, AFR reported.
The bank said it would not adjust the redraw facilities of customers who are in financial hardship or have deferred their loan repayments due to COVID-19.