Members Equity Bank Limited (ME Bank) has been fined $820,000 for making false and misleading representations and failing to provide required written notices regarding home loans.
In the Federal Court in Victoria on Friday, ME Bank was ordered to pay $750,000 for contravening Sections 12DB(1)(g) and 12GB(1) of the Australian Securities and Investments Commission Act 2001 (Cth), and $70,000 for contravening ss 64(1) and 65(1) of the National Credit Code (as set out in the National Consumer Credit Protection Act 2009).
At a hearing in September, ME Bank pleaded guilty to the charges, which were laid after an investigation and referral by the Australian Securities and Investments Commission (ASIC).
Between 25 May 2018 and 3 September 2018, the bank sent 589 letters to home loan customers informing them of incorrect minimum repayment amounts to be paid after the expiry of either a fixed-rate or interest-only period. Each letter contained a repayment amount that was less than the actual amount required to repay the loan.
Between 28 December 2016 and 23 February 2018, ME Bank also failed to send letters to some customers to inform them the interest rate and minimum repayment amount was changing after the expiry of an interest-only or fixed-rate period.
Impacted customers have been remediated. ME Bank was acquired by the Bank of Queensland in 2021.
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