“I had $80,000 in my draw down and now there is zero,” she said. “I am also still awaiting a call from their management so I can voice my complaint (and) absolute outrage.”
Treasurer Josh Frydenberg said the banking and financial services royal commission reminded banks of the importance of complying with both the law and community expectations.
“Now more than ever is a time to put customers first,” he said. “Every bank needs to play their part in Team Australia.”
Marcus Strom, who is the president of the Media, Entertainment and Arts Alliance union, checked his own account after reading the article and discovered funds had been moved on Monday last week from “money available, to money not available in a loan.”
Mr Strom, speaking in his personal capacity, said he had neither been given warning nor asked permission.
“I just thought it was a bit tricky,” he said.
A letter received by customers on Friday, seen by The Sunday Age and The Sun-Herald, said the change was only to “the amount of funds available to redraw”.
“The current design of the (redraw facility) allows people to ‘over-dip’ to a point where they could fall behind their original repayment schedule. When this happens a customer’s repayments may increase in the future … (and) this could create financial stress for some customers.”
Mr Strom didn’t believe the explanation was credible. “I’m not someone, I don’t think, at risk of overdrawing,” he said. “It looks like they’ve just done some accounting to me.”
One customer reported $24,000 had been removed from her redraw facility and transferred to her loan. Another household, whose hours of work have been dramatically reduced in the coronavirus crisis, found $10,000 had been moved.
Liberal Senator Andrew Bragg, chair of Select Committee on Financial Technology and Regulatory Technology, said the coronavirus pandemic was a time for institutions to step up.
“I’m surprised that any institution would pull the rug from underneath a customer in this environment,” he said. “Not just because of the pandemic, but because we’ve just had a banking royal commission.”
The move by ME Bank to shift money away from customers prompted speculation that it wanted to shrink its loan book and reduce the risk of defaults.
ME Bank said the changes were designed to halt “over-dipping” and therefore reduce financial hardship down the road.
“No money has been removed from customer accounts. The adjustment made is to the amount available for redraw,” a spokesman said.
“We understand that the change has caused concern to some customers, particularly in the current environment.
“We are reviewing the personal circumstances of each customer affected and are committed to working with them to determine how we can help with their individual financial needs.”
Mr Bragg said Parliament, once it returned, needed to “push through all Ken Hayne’s changes that he’s recommended [from the royal commission].”
Zach is a reporter at The Age. Got a story? Email me at firstname.lastname@example.org
Adele Ferguson is a Gold Walkley Award winning investigative journalist. She reports and comments on companies, markets and the economy.