Thousands stung by BoQ's $58m oversight

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Bank of Queensland (BoQ) will expand its review of its compliance systems, following a request from ASIC.

There have been further reports of errors in the bank’s interest rates and fees.

The review was sparked after BoQ self-reported to ASIC a $12 million customer error following a system issue. This error was caused by a failure to link mortgage offset accounts (MOAs) to some eligible home loan accounts over several years. The failure meant borrowers paid more interest than they should have done.

In August 2013, BoQ said an internal review had identified further errors, some dating back to 2004, resulting in customers being overcharged in fees and underpaid in interest. The bank confirmed that it would refund an additional $34.5 million and pay another $11.5 million to fix these additional errors.

The MOA and additional errors have impacted approximately 46,000 customers with refunds and remediation costs of $58 million.

“We want to make sure the expert’s review leaves no stone unturned and all customers are appropriately compensated. The review will also ensure that any necessary compliance system improvements are made to minimise the occurrence of similar errors in future,” ASIC Deputy Chairman Peter Kell said.

The refunds to customers impacted by the errors reported in August 2013 are expected to be completed in the next 15 months. Affected clients do not need to make a complaint, but can call BoQ if they have any concerns.