I have been panicking tonight after receving a letter from my bank.
I have been paying interest in advance for the past four years on my property. I pay every year near the end of the financial year. This year I did the same – I fixed my home loan via my bank stgeorge bank. I did this well within time via a st George bank branch –they put in the application and submitted it on my behalf. I have sufficient money in my account all the time (another st George bank account) to take the money out of.
After that I rang up st George to confirm that everything is in place (at the beginning of the month -June) the lady on the phone told me everything was in place and money would be taken out on the 28th June. I rang up 29th June morning and they said sorry –system error it will get taken on 29th June night . The daily routine continued till the 1st july. Still the same message from a different person on the phone everytime.
A) I have an email from st George bank teller that they had a system error and this will get corrected and correctly dated.
Now today i receive a letter from st goerge bank to me saying that they were unable process the interest in advance –sorry.My loss : Given this is clearly St George banks error what are my legal options – It would cost me approximately a 10000 tax hit because of this error on part of the bank. please help.
I am sure I would not be the only person facing this problem – This is definitely a wider issue affecting many customers -please contact me on [email protected] if you or anyone known to you has faced this problem.
The only thing I could say is to do it a month earlier next time… Nothing wrong with paying interest in advance at the start of June or mid June as long as you don’t miss the 30th. Noting it’s one of the busiest times of the year in finance.
Re the problem you have:
1: Lodge an internal complaint with the banks complaints area (get a reference number)
2: Lodge a complaint with the banking ombudsman (they won’t take a complaint without the banks reference number)
3: Ensure that you request confirmation of the system error; noting the bank will be required to reply in writing. If there was an actual error the bank can track via their IT department. If not your second complaint is that they have lied to you to conceal the true cause of your loss.
4: if is turns out no: 3 is not a system error you might have a good case for the ombusman.Feel sorry for you but the problem is trying to pay on the last two days of the financial year; therefore some risk must be accepted if something goes wrong ( you didn’t leave enough room for error).
next year aim to have it paid before say the 15th… I try to process these in the first week of June :
p.s. If you are one year fixed the rate won’t mature until July 11. Make sure the future break costs are coverred in your complaint if you want to prepay next June… You might get two lots of interest in this fin year / one paid July 10 and one paid June 11.
Thanks banker – really appreciate your comments and they will be very useful tommrow.
1 à I will lodge a complaint tomorrow morning with the bank and get a complaint number.2 à I will lodge a complaint with the banking ombudsman
3à they definitely had a system error ( I have that in email) – also in phone conversations – they kept on repeating that it would be taken on next night for 3-4 days – for these conversations they kept on telling that these conversations are recorded but they cannot give me anything in writing. The email from the teller (person who lodged my application) was separate.
4à I think the bank will argue that this is a system error.
I understand your point about trying to pay earlier but I was bound due to the past year -interest became due in june 29th each year.
I do not understand your comment about — “You might get two lots of interest in this fin year / one paid July 10 and one paid June 11.” Is this about me paying two lots of interest next financial year is it?
This is really bad.Regards
Ankit
This financial year e.g. Starting July 1. You have already now paid 1 years interest (paid July). If you break your fixed rate in June 11 to enable you to prepay in June 11 you will get another 12 months ( in this fin year).
That means your financial year ending ’30 June 10′ will show NIL interest and your financial year starting ’01 July 10′ and ending ’30 June 11′ you could have two years interest.
You could delay your 2010 tax return for a year and process together with 2011 – might prevent paying the tax as they will partly balance. the tax rates will vary but it will limit your loss…
Please advice if anyone else has had this problem with st george bank this year.
Now today i receive a letter from st goerge bank to me saying that they were unable process the interest in advance –sorry.
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