Mortgage Misery - I Hate Banks.com.au

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Bank Rip-Offs Revealed - Click for Video

We have named this article after a story which ran on the Channel 7’s Today Tonight program on 22-May-2003. In line with the common bank practice of overcharging customers on interest and charges as revealed in our Banks Behaving Badly article, the Today Tonight program exposed the fact that the banks do the same thing with stamp duty.

When you obtain a loan, say for $200,000, you have to pay the government stamp duty on the amount financed. This is collected by the banks and passed on to the relevant state or territory govt. But when you later refinance, say to a new $300,000 loan to pay for renovations, you are only legally bound to pay stamp duty on the extra $100,000 – as the govt. has already received it for the original amount.

The problem is that many banks charge stamp duty again on the FULL AMOUNT. If they do so, they are supposed to refund this to the customer within 8 weeks.

However, the Today Tonight program conducted an investigation into the practice and found many cases where the banks had only passed on the legal amount to the govt., and had pocketed the rest instead of refunding it to their customers.

Some of the alleged victims of the Commonwealth Bank as documented by the Today Tonight team included the stories of:

Bill and Jill Auld, who had a $400K mortgage and refinanced for another $50K to enable them to renovate. The Colonial State Bank (owned by the Commonwealth Bank) charged them stamp duty again on the whole $450K. 18 months have now passed and no refund has been forthcoming although they claim the bank owes them around $1700;

Paul Schnyder, who claims to have refinanced over a year ago and paid full stamp duty, although no refund has been forthcoming; and

Jenny Thomas, who also refinanced over a year ago (Apr 2002) and is still waiting for her cheque. She stated that people should really look very carefully at what their banks are charging them on their mortgages, especially if they refinance.

Today Tonight interviewed Kevin Nowland, a former bank manager who invented a computer program which allows people to check their mortgage statements for errors.

He claims that the banks unfairly rake in millions of dollars from home buyers in overcharges. Kevin’s program is available to the public through a website called Mortgage Watchdog.

Today Tonight also contacted Geelong mortgage broker Gerard Rowan. He speculated that there are possibly thousands of Australians who have re-financed mortgages and have been ripped off this way by the banks.

He stated that in his experience, he’d found clients who hadn't been refunded by their banks until 12mths after the re-finance, and he’d found others who had never been refunded at all.