Banks pay hundreds of millions in refunds

HUNDREDS OF MILLIONS IN REMEDIATION BY BANKS

A number of Australian banks and financial services providers have provided refunds to customers as part of significant remediation programs.

HOME LOANS

Almost $250 million refunded to almost 540,000 consumers

Due to:

- About $239 million repaid over account administration and processing errors connected to home loans, such as failures to link offset accounts and apply the correct interest rate

- Reliance on fraudulent documentation

- Breaches of responsible lending laws

ADD-ON INSURANCE

More than $128 million repaid to consumers

- $117 million in remediation for car loan add-on insurance remediation, affecting more than 212,000 consumers

- $10 million over credit card add-on insurance, affecting 65,000 consumers

- $900,000 related to home loan add-on insurance programs affecting more than 10,500 consumers

CAR LOANS

Almost $90 million refunded to almost 17,000 consumers

Due to:

- Reliance on fraudulent documentation

- Breaches of responsible lending laws

CREDIT CARDS

More than $11 million to more than 34,000 consumers

Due to breaches of responsible lending obligations

* All figures are since July 1, 2010 and are based on information provided by ASIC.

Source: Opening address by senior counsel assisting the commission Rowena Orr QC.