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Bank fined A$820,000 for giving home loan borrowers wrong information, after it “chose to use automated systems”
Lenders have been put on notice to use “very high levels of diligence” on software systems after the Federal Court fined Members Equity Bank $820,000 for sending home loan customers letters with inaccurate information.
Tim Mullaly, ASIC executive director enforcement and compliance, said banks were expected to properly notify and update customers with accurate information about changes to loans. An internal audit in November 2015 highlighted the potential for defects in the operation of the software, and a lack of controls to ensure compliance with statutory requirements related to customer statements. The judge said ME Bank had failed to use the report “as a prompt to investigate further, which likely could have resulted in the coding and data problems being detected and rectified at an earlier point in time”.
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