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Ex-Banker Alleges Widespread Overcharging on Mortgage Accounts by Banks
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Added: 06/10/2004
Type: Summary
Viewed: 917 time(s)
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Ex-Banker Alleges Widespread Overcharging on Mortgage Accounts by Banks
Most mortgage holders are the unknowing victims of bank calculation errors according to Kevin Nowland ex senior banker turned consumer watchdog. Mr Nowland's crusade started when he detected $22 million in overcharges over a 12 month period at the small regional bank where he was employed.
According to Mr Nowland calculation errors affect bank clients worldwide, as evidenced by the following:
United States - In a US Government sponsored report in 1993, then New York Attorney General Robert Abrams stated that between $5 billion and $10 billion in excess escrow funds are charged by mortgage lenders nationwide each year. He further stated in a news conference that “…. overcharging is virtually universal (through the banking industry).” These figures are confirmed by the FDIC. US estimates are that an astounding 45% of home mortgage holders have been overcharged by $1500 or more and that 13% are owed over $10,000 by their bank.
Australia - A survey published in The Sydney Morning Herald has discovered that 54% of monthly statements contain errors, 80% of these errors favour the banks and the average monthly error is $242.
Canada - The Halifax Herald Limited reported that the Royal Bank is quietly sending out refunds totalling $13 million to 200,000 mortgage clients for miscalculated interest dating as far back as 1992.
United Kingdom - A Sunday Times survey suggested that mortgage interest overcharging was running at £1 billion a year.
Errors are introduced into mortgage payments via incorrect interest being applied, interest rate changes applied too early or too late, computer programming errors, human input errors, improper rounding methods and failure to account for leap years among others. These errors are present in all types of bank accounts not just mortgages. Mr Nowland claims that it's a rare account holder that does not have a refund owing to them.
On leaving the bank, Mr Nowland developed software designed to detect errors in all types of bank accounts. This is now available to anyone wishing to check their own accounts.
The software, distributed by BankSentinel.com is used by over 2,000 accounting firms to assess clients' statements and by many thousands of individuals to monitor their own accounts. It has helped make them aware of millions of dollars of overcharges. Banks acknowledge that the software is accurate, and routinely give refunds after being presented with BankSentinels’ analysis of clients’ statements.
BankSentinel is so confident of the error rate in statements that it offers a 100% money back guarantee to anyone who fails to find mistakes. They very rarely get a claim. "Our highest reported refund from a bank to date is in excess of $100,000. We’d love to hear of someone breaking that record”.
Many people suspect that they are being overcharged by their bank but up till now proving it has been difficult. BankSentinel claims that most people have a pleasant surprise waiting for them if they check their accounts. “It doesn’t matter how long ago the error occurred, the software will detect it and even calculate the compounding interest owed by the bank since the error was made. An annual mortgage overcharge error of just $200 will compound to over $13,000 on a thirty year loan”.
"That's a tidy sum and better in your pocket than in your banks'."
More information is available at www.banksentinel.com
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