I don't know about you, but I work hard to pay off my mortgage as quickly as possible. Then to have the bank make mistakes and incorrectly take money from my account is not only unfair, but insulting.
I never considered it necessary to check the calculation of my bank statement. I didn't think there would be a need. I couldn't have been more wrong. Every day people are receiving bank statements in the mail for their mortgages, saving accounts, personal loans and overdrafts that they assume are correct, but they are totally mistaken.
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.
If you are like many people you may be tempted to think that "this can't happen to me" or that this "isn't a real problem and it's being blown out of proportion." Before you make that mistake think about this.
Recently a major Australian bank found they had overcharged fees on 55,000 customer's accounts and it totalled $52,000,000. That's right 52 million dollars.
That's an average of $945 for each person.
What I find pretty amazing about this is that the bank found the problem NOT the customers. That means that five thousand people didn't notice the best part of one thousand dollars missing from their bank account.
You may be thinking "I know I'd sure notice $1,000 missing from my account." ... but I am willing to bet you $200 right now that if you called those 55,000 people mentioned above they'd have said exactly the same thing before the bank informed them of the little blunder they made on their account.
So why didn't they notice the $945 overcharges?
The problem is that bank statements can be difficult to read and are not always what they seem. Some of the errors are very difficult to locate if you don't know what to look for.
There is a way to keep the banks honest. We now have a simple and powerful tool to check our bank statements quickly, easily and most importantly 100% accurately - Loan Checker.
But is it worth it? How often do these mistakes happen? Unfortunately, it is far more often than you would think.
A former Commonwealth Bank officer, Martin McKenna, has found that ...
That gets you thinking about these "mistakes" when it favours the lender that much doesn't it!
"The average error is about $242 per monthly statement. Hundreds of thousands of Australians are potentially affected�
The Daily Telegraph - December 24, 2000
Staggering isn't it? When I discovered the rate at which banks made mistakes I was stunned but assumed it must have just been a few dollars here and there; $242 dollars per monthly statement is incredible.
So what does this all mean? What does it add up to? You do your own sums, but here is what the statistics (and the most conservative ones at that) had me thinking when I first discovered them ...
This tells me that on average the interest they overcharge in one year on your loan account is $1,210.00 Ouch!
The bad news is that knowledge is a dangerous thing. Knowing what you now know, you have to some extent cornered yourself into making an important decision. You will decide one way or another how you are going to deal with it. Before leaving this page you will select one of the following alternatives... even if you think you haven't decided.
It is a bit of a "no brainer" isn't it? The Loan Checker software is by far the most cost-effective solution available.
To do nothing is either naive or nuts, as is paying the bank to check your statements for you. Paying a firm to do it for you isn't a bad option but if you want to dig through 6 years worth of statements at $55 a month you are looking at $3,960 plus 20% of the overcharges they find. Why not use the same kind of software these firms use to find banking errors every day for a fraction of the cost?
Undoubtedly you will have seen countless expos's about the banks on TV programs including Channel 7's "Today Tonight", Channel 9's "Money" and "a Current Affair", plus The ABC's "4 Corners", "7.30 Report" and "Sunrise".
Click the play button below to watch a short YouTube video of A Current Affair looking at bank errors.
"A mistake at the beginning could prove pretty expensive over the long term"
Paul Clitheroe - Host of Channel 9's Money show and chief commentator for Money magazine
It is great to find a $300 error on your statement from 10 years ago and even better to get the money back. What most people don't realise however is that it is probably less than half the money you are actually entitled to. In addition to the money taken from your account interest has also been charged on this money - compounding every single day for the last ten years. With the Error Compounder you can now chase every cent you are entitled to.
Now I am sure you are probably thinking, "can't I do the same with a spreadsheet?" Yes, some people may be able to but firstly you must be sure you are using the right formula and secondly you will need to know how to do some pretty complicated programming to make sure it's accurate. So even if you could do it, why waste the time and effort when we have gone to all the trouble for you?
We are frequently asked "will the banks actually give me my money back?" The answer is of course they will ... as long as you can prove to them that they have made a mistake.
The banks actually want to correct their mistakes and give you your money back. Recently Mr Haydn Park, the head of corporate relations of a major Australian bank has said "When someone comes to us and says "You've done something wrong, then we don't quibble, we do something about it.".
But if you don't check your statements and find the errors to show the banks where they have gone wrong you will never know just how much you have been overcharged.
Everyone knows that "you get what you pay for". Why would you risk what is potentially thousands of dollars of your own money on some piece of "free ware" that you got off the front of some magazine? Exactly, it just isn't worth the risk (and embarrassment) of it getting it wrong.
Every other piece of software we have checked has fundamental mistakes built into it.
How embarrassed would you feel if this happened to you? Imagine turning up at the bank, ready to claim your hard earned money back, statements in hand and software print out in hand only to have a junior bank teller point out that your supposedly "accurate software" can't actually add up 3 numbers correctly or that your compounded interest calculations are based on the wrong time cycle.
As we said above the Loan Checker software is only a fraction of the cost of the other alternatives.