Australian banks overcharge mortgage offset accounts, ASIC reports $55M compensation

The Australian Securities and Investments Commission (ASIC) reviewed the offset‑account practices of eight major Australian banks, examining more than 200,000 home loans. The regulator found that many offset accounts were not delivering the promised interest savings, with 77 % of bank‑reported failures only identified after ASIC forced the data.

Banks have so far paid out over $55 million in compensation to customers whose offset accounts failed to reduce loan interest, but ASIC warns the true amount of losses could be far larger. In March, Australians held $349.1 billion in offset accounts, a 28 % increase over the previous two years, highlighting the need for better oversight and consumer checks.