Australia markets closed

    +1.00 (+0.01%)
  • ASX 200

    +1.70 (+0.02%)

    -0.0039 (-0.57%)
  • OIL

    +0.24 (+0.27%)
  • GOLD

    -8.40 (-0.47%)

    -2,958.62 (-8.68%)
  • CMC Crypto 200

    -33.17 (-6.12%)

    -0.0001 (-0.02%)

    +0.0090 (+0.82%)
  • NZX 50

    -129.53 (-1.10%)

    -264.23 (-1.96%)
  • FTSE

    +8.52 (+0.11%)
  • Dow Jones

    -288.25 (-0.85%)
  • DAX

    -152.89 (-1.12%)
  • Hang Seng

    +9.12 (+0.05%)
  • NIKKEI 225

    -11.77 (-0.04%)

'You've robbed me': Bank moves $6,300 of retiree's money

·2-min read
Stressed Hispanic couple paying bills on laptop
A retiree has told Yahoo Finance that ME Bank shifted $6,300 of his redraw funds into his mortgage without notice. (Image: Getty)

A retiree has accused ME Bank of removing access to more than $6,000 of cash previously available to him to withdraw.

The customer, who requested anonymity, told Yahoo Finance that he had built up a substantial amount available to redraw in his home loan by making repayments on top of the minimum required.

"I recently had my redraw facility reduced from some $12,000 to $5,700 with no previous contact or current explanation," he said.

When the customer phoned the bank to complain, the fund shift was not reversed and he was told he could apply for a loan extension with a fee of $250.

In written correspondence to the bank, the retiree accused the bank of theft.

"If, as has happened, I repay the loan earlier on the understanding my money – not yours – can be redrawn when I need it then you have robbed me," he wrote.

"It is the same as if I put my money in a savings account or stored it under my bed and it was taken without my consent. That is stealing my money."

The latest allegations follow similar testimony revealed last weekend of ME Bank shifting funds out of redraw facilities without notice. The move has upset especially those customers who have needed the extra funds during the current economic downturn.

ME Bank has confirmed that a shift of funds from the redraw balance into the mortgage had indeed occurred for some home loan holders.

"No money has been removed from customer accounts. The adjustment made is to the amount available for redraw," the company stated.

"We understand that the change has caused concern to some customers, particularly in the current environment."

After the news broke publicly, the bank started reviewing the circumstances of the customers impacted.

The auto-response from ME Bank after the retiree wrote to complain about the reduction in his redraw balance. (Image: supplied)
ME Bank's response after the retiree's complaint. (Image: supplied)

"ME is in the process of contacting affected customers to see if any support is required and offering options such as rearranging financing at the bank’s cost for customers whose redraw limits have been reduced."

Industry speculation is that ME Bank shifted funds out of redraw facilities in order to reduce its risk of loan defaults during the coronavirus crisis.

Sixteen industry superannuation funds own ME Bank. Two of the biggest co-owners – AustralianSuper and Hostplus – declined to comment to Yahoo Finance while the boss of First Super told Nine that it would seek answers from ME.

Are you an ME Bank customer who had your money shifted? Contact us.

Sign up to the newsletter for exclusive access.
Sign up to the newsletter for exclusive access.

Follow Yahoo Finance Australia on Facebook, Twitter, Instagram and LinkedIn.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting