ME Bank facing 62 charges in Federal Court

On Wednesday, ASIC confirmed the bank is facing 62 charges, 44 of which relate to letters issued by ME Bank to home loan customers between September 2016 and September 2018.

ASIC claims the letters made false and misleading representations about “customers’ relevant annual interest rates and/or the minimum repayment to be paid after the fixed-rate period expired, and/or the minimum repayment to be paid after the interest-only rate period expired”.

The remaining 18 charges relate to allegations by the corporate regulator that the bank failed to give written notice to home loan customers that their annual interest rates and minimum repayment amounts were changing after their interest-only rate and/or fixed-rate period expired.

ASIC first filed the charges against ME Bank in May.

“These charges relate to alleged contraventions of sections 12DB(1)(g) and 12GB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) and sections 64(1) and 65(1) of the National Credit Code (Cth), between 2 September 2016 and 3 September 2018,” ASIC said at the time.

In a statement given to ifa on Wednesday, Bank Of Queensland (BOQ) Group, which acquired ME Bank in June, responded to the charges.

"The alleged contraventions concern home loan customer communications over a two year period ending September 2018," the statement reads.

"These issues were self-reported by ME to ASIC in October 2018 and remediation paid to all affected customers in 2019 was approximately $105,000.

"BOQ Group was aware of this matter during the due diligence process for the acquisition of ME Bank. BOQ Group has been engaging constructively with the CDPP to work towards a way forward.

"As these matters are before the Court, BOQ Group does not intend to comment further at this time."

The matter will return to court on 3 November.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.