Finding Errors In Your Bank Statements

[regrow]

Hello

I had this emailed to me from richmastery.
www.mortgagewatchdog.com.au

I can't believe how totally naive I had been, just accepting that the banks never actually made a mistake and my statements were 100% accurate. Now surely these mistakes are just tiny errors involving a few cents here and there? Well guess again.

Let me introduce Kevin Nowland, he worked for the banks for 15 years and then blew the whistle on the bank fat cats when he discovered $22,000,000 in interest overcharges in only a 12-month period.

Amazingly this was just in a small regional branch of the bank! He estimates that over just the last 5 years banks have overcharged average Australians, just like you and me, over $1,000,000,000. Yes that's right, one billion dollars!

Has anyone bought this software?

Does it work?

Regards

Regrow

You are a fool for 5 seconds if you ask a question, but a fool for life if you don't.

 

[Sunfish]

The ATO insists I reconcile my bank statements. In nearly 40yrs the biggest mistake I have found was less than $1 when a lost CC was replaced. Being a crappy bookeeper I resented the work needed to find the error.

If the bank is "deliberately" (I can't think of a "softer" term) charging you incorrect interest then it is a criminal act. Theft!

The @functions in your spreadsheet will give quite accurate repayments on a standard loan.

Thommo

 

[Will1]

Cannot add anything useful on the question of software, but using excel one day I did some calculations on one of my loans. It was significantly different to what I was charged. < I do have some finance skills>

I referred it to the large listed bank who later called me and said it would be corrected. - It was! No letters no explanation, just money.

More commonly I am incorrectly charged large fees for various facilities and check some of these from time to time. Software would not help me on these.

Once your affairs become complex, these things can happend and I do not suspect anything other confusion and errors by junior staff. But it is worth checking.

 

[Tasman]

Hi All,
The company promoting this product is using an exaggerated scare tactic to generate sales for a product functionality that is already covered in other tools used by investors. Some of the tools would include mortgage calculators, spreadsheets with financial functions, and more complex products like Quiken/MS Money/MYOB.

If you have a product like the last three and have already data entered your financial transaction details, then they can be readily used for checking interest amounts. With my old version of MSMoney 1995, this is easily done. Thus to buy another product would involve additional work in keying the data into the new product, which is essentially a packaged interest rate calculator with bells and whistles.

Whilst I believe that mistakes in financial charges can and do happen, reconciling your statements and checking interest charges at strategic times can minimise your risk . Times to check interest are when first statement for a loan or investment arrives, and latter, checking when there is a variation to the terms or conditions of your loan/investment such as interest rates changes.

Personally I have checked interest charges on my loans with ANZ, Westpac and CBA, and have found them to be correct. Except where in one case, backdated transfers/corrections by bank between accounts had become too complex for the banks software to balance all the interest between the three involved accounts (problem was between offset and LOC where offset in itself does not earn interest, but interest earned is shown on linked loan account), but the staff still claimed that the interest calculated (only $100 error) was correct. The point being when manual events are happening on your accounts, this is where the potential for error occurs.

It is unlikely that the promoted software would handle complex manual events. Normal interest rate senarios involves well tested financial software. However it is always best to do your own checks.

Tasman

 

[geoffw]

I have found a largish mistake in my own bank staterments- when we were buying the block of land which we used to buy our PPOR. I was a bit surprised when we received a statement after the first 12 months showing that we had virtually not paid anything from our loan- it was a P&I loan. I eventually found that the bank was charging me 1.5% too much. The bank did credit the difference- I spent a fair amount of time before it came throgh to ensure that the amounts credited were correct.

Even something simple like a spreadsheet would have pinpointed that problem earlier. I wonder how often the bank makes mistakes like that without people realising.

 

[Ebbie]

Cannot add anything useful on the question of software, but using excel one day I did some calculations on one of my loans. It was significantly different to what I was charged.

I've just found the same thing using the following formula:

Daily Interest = (Daily Loan Balance x Interest Rate)/365 days

I added the total daily interest up for each month and then compared it to the actual interest paid on my monthly bank statement. Some results were only out by a few cents here and there (not sure why) but others were significantly different.

I might have to look into the way I'm doing my calculations before I start calling the banks. If interest is charged at the end of the month but the statement period begins a week or two into the month, when is the interest period for? Obviously if the interest is charged (and paid) on the 31st then the last day of the month can't be included in the current interest bill because the closing balance isn't known until the end of the day.

Does anyone have their own spreadsheet they are willing to share?

Regards, Ebbie.

 

[DaleGG]

Hi

Yes, I have the software. I bought it about 8 to 10 years ago, I think.
I used it about 1/2 dozen times and rarely found anything worth noting....a few cents here which was often wiped out in the following month by another small discrepancy the other way....and then put it away.

I agree with the sentiments already expressed....if you are competent with a spreadsheet you can keep a close eye on things.

Dale

Has anyone bought this software?

Does it work?

Regards

Regrow

You are a fool for 5 seconds if you ask a question, but a fool for life if you don't.

 

[Ebbie]

I might have to look into the way I'm doing my calculations before I start calling the banks. If interest is charged at the end of the month but the statement period begins a week or two into the month, when is the interest period for? Obviously if the interest is charged (and paid) on the 31st then the last day of the month can't be included in the current interest bill because the closing balance isn't known until the end of the day.

Does anyone have their own spreadsheet they are willing to share?

Please disregard my previous questions. My calculations are spot on now, the problem was even though my statement was from say the 6th day of the month to the 5th day of the next month, the interest period is actually calculated from the 17th to the 16th of the month and charged on the 31st. It sounds a bit confusing (especially when it is linked to an offset account) but I've figured it out now and will be slowly going back and working through my big stack of loan statements.

I agree with DaleGG and the others - rather than spending big money on a fancy program an Excel spreadsheet is all you need to keep a close eye on the banks.

I'll post the results once I'm finished as it will be interesting to see how accurate the banks were. According to websites like Interest Savers it appears to be very common for banks to be over-charging interest! Mortgage Watchdog says "The average error is about $242 per monthly statement. Hundreds of thousands of Australians are potentially affected”. We'll see.


Ebbie.

 

[Lotana]

When I've seen these ads for the first time about 3 years ago I decided to recheck my loan statements. To my complete disapointment, the interest was calculated correctly on all 6 splits. However, I found, that the split fee of $300 was applied twice in one year, to different splits. The bank corrected it in no time and refunded overcharged interest back to the date of the error.
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[Brenda Irwin]

When doing your own calculations of interest per month, bear in mind that some banks charge the interest on the last business day of the month. This might make a short month and the interest levied seem very low. The next month might end up being a 33 day month because of the weekend of the previous month being added in and the interest levied seems huge.

 

[Pushka]

We got that email too and deleted it. On the other hand, we had a mortgage with NAB a few years ago. We didnt really check on it, just assumed it was all ok. Then we got a letter from NAB (I think it was publicised in the media at the time) and we were credited with $2000! Sweet!

 

[BayView]

This program was promoted by A Current Affairs on channel 9 in Sydney which doesn't say to much for their ethical standards, as they would have done some research on the software and looked at the web site.

Don't be surprised if the company paid for their space on the program.

 

[eternit]

I did some calculation on a property I bought mid last year.

I got the interest paid monthly data into spreadsheet from 05/06/2007 to 05/06/2008 and then added it up.

Then I used infochoice.com.au loan repayment calculator to check the monthly interest paid and multiplied it by 12 to get the yearly interest.

Now the interest rate should be the same as it was on fixed interest rate.

There was a different of about $600. I am just wondering if I am making a mistake or I have infact paid too much interest?

Thanks.

 

[Lamingtons]

Ok i tried my darnest to calculate the accuracy of interest using excel. I'm just confusing myself and I must be doing it wrong.
I have the IPMT and I'm not sure what I'm doing wrong. I'm off from Homeside by a few hundred.

 

[hobo-jo]

I've just found the same thing using the following formula:
Daily Interest = (Daily Loan Balance x Interest Rate)/365 days

It would need to be divided by 366 this year.

 

[Novar]

We were struggling along once with repayments, and wondering why, until I discovered payments still going into a hold account for a house sold 6 mths previously. The account we never thought still existed had something like $5,000 in it!!

What was that mortgage checking lot recenly on ACA that paid you $250 if they didn't find mistakes.

 

[Whozat]

Has anyone bought this software?

Yes. Bought it on one of their 'specials' at maybe $125 after having received those emails numerous times. Because the email came from the Reno Kings I gave it a bit more credence.

Does it work?

I believe it is accurate as long as you put in your figures correctly. In the checks I did it didn't show up any errors in the banks favour, in fact it showed up a few measly amounts in my favour.

Would I recommend it? No. I think the software, although functional is not user friendly at all. Very tedious method of data entry, especially if you have a line of credit or an offset account where the balances are often changing. I feel sure that some method allowing you to cut and paste from online statements would have improved this product. If it is possible, I didn't find it.


Hope this helps.

 

[fernfurn]

I checked all my accounts including a business account every day for 5 years with St George and they never made a mistake

 

[Rahvi99]

I've used Mortgage Watchdog - wouldn't recommend it - too user intensive having to manually type all the details in.

If you must give it a go - grab it here for $46.

https://secure.shareit.com/shareit/product.html?productid=300044081&sessionid=1113668800&random=56f9c0e485f90a3c0f13c88befab1b60

This is the much better one - and more features. I love the CSV import tool - that way you can import your online statements (saved as CSV files) and check straight away..

On special at the moment too I see.. $97.

http://www.homemoneymanager.com/home-loan-interest-manager.html