05-May-2020 • Corporate
Dear customers,
We are sorry.
We recently adjusted the redraw limits on one of our older legacy home loan products, which has caused upset for affected customers.
This change was made with the best of intentions – to protect some customers from the risk of redrawing too much money, which could have inadvertently put them behind their repayment schedule.
But we messed up.
We should have worked harder to explain a complex product and process simply so that redraw limits were better understood.
To make this right, every affected redraw customer will be eligible for an assistance package, including to discuss your redraw and your needs.
This process is already underway. Our priority is to fix this situation and to regain the trust of our customers. We can and we will do better.
Why the adjustment was needed
We made the decision to adjust the redraw of customers after analysis showed a group of customers on this older home loan product were at risk of going above their scheduled home loan balance, if they were to activate the full redraw facility.
If these customers had redrawn the full available amount, this would leave them open to:
- Paying additional interest on their home loan.
- Being at risk of not meeting their scheduled repayments.
- Hardship at the end of the loan term.
The adjustment was only made in relation to older home loan products. It does not affect any loans originated over the past 5 years which operate with a different redraw feature.
Eligible assistance measures
Affected redraw customers are encouraged to contact us to request assistance.
The measures we are offering include:
- Extending the term of the loan to reduce the size of the regular repayments.
- Discussing options for refinancing or topping up loans, at the bank’s expense.
- Offering a repayment holiday for up to six months.
- Other credit options including extending additional credit.
Our sole intention was to protect customers
Our only intention was to stop customers getting into financial difficulty. The bank never benefited from this decision.
Withdrawing to a redraw limit all at once can put a customer in financial difficulty. Customers do need to be protected from unexpected increases to their home loan repayments. But the way we put those protections in place was clearly not good enough.
ME bank is financially strong
Rumours about other motives are simply untrue. The bank is in a strong financial position and our capital and liquidity levels are well above both internal targets and regulatory requirements.
How to request help
We have created a dedicated
online help form where customers can request a call back.
Alternatively if the issue is urgent, customers can contact our call centre on
13 15 63.
Please be aware that a large volume of customers are calling us at once. We are working to address every customer issue, but you may experience longer than usual wait times. Thank you for your patience.
Once again, we sincerely apologise for the upset this has caused some customers. We must do better and we will.
Jamie McPhee
Chief Executive Officer