ME Bank indicted in 62 criminal cases over mortgage refusal

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ME Bank, associated with the industry, faces 62 criminal charges for changing interest rates and minimum payments on home loans without properly notifying clients over a two-year period.

In May, the corporate watchdog issued a brief statement that it was facing criminal charges against ME Bank. Age as well as Sydney Morning Herald disclosed the nature of the charges in May, but the exact number of charges is unknown up to this point.

The CDPP has charged ME Bank with 62 criminal cases for failing to properly report changes in home loan terms.

The CDPP has charged ME Bank with 62 criminal cases for failing to properly report changes in home loan terms.Credit:Ken Irwin

ME Bank reported that the Australian Securities and Investment Commission independently reported a communication error in October 2018, and affected customers have already received compensation in the amount of USD 105,000.

The latest details of the case appeared in a summary of the criminal case filed with Federal Court on May 25 by the Director of the Commonwealth Public Prosecutor’s Office (CDPP). The CDPP summary reveals that 44 of the allegations relate to ME Bank, which allegedly made false and misleading statements in a series of letters sent to clients regarding changes in their home loans.

In letters to clients, it was advised that the minimum payments and interest on mortgages would be increased next month, but the amount indicated in the correspondence was less than it should have been.

The remaining criminal charges are related to violations of the National Credit Code, when ME Bank allegedly raised interest rates and minimum payments without notifying customers.

The CDPP claims that ME Bank violated the law by not providing or providing inaccurate written correspondence required in its capacity as a creditor.

Age as well as Bulletin reported that a communication failure was caused by computer error during technological upgrades, according to one senior source close to the bank.

ME Bank was previously sanctioned The Banking Code Compliance Committee by the industry body for not reporting changes to its revision policy, resulting in over 20,000 clients no access to cash in the midst of a pandemic.

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