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Bec Wilson<\/a>Money contributor<\/p>\nAugust 1, 2026 \u2014 5:01am<\/p>\n
August 1, 2026 \u2014 5:01am<\/p>\n
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Remove items from your saved list<\/a> to add more.<\/p>\n AAA<\/p>\n Have you got an offset account, and if so, have you ever checked it\u2019s working properly to reduce the interest paid on your home loan? Sounds like something most people would assume the bank knows how to get right, right?<\/p>\n Well, according to a report by ASIC that was published this week, it\u2019s now something we should all be worrying about, and checking on promptly.<\/p>\n The Australian Securities and Investments Commission has reviewed the practices of eight banks, looking at more than 200,000 individual home loans to check whether the offset accounts in place were delivering the savings that were promised, and the commission has been unimpressed by the mess.<\/p>\n Its report shows that, in the period from September 2023 to August 2025, banks paid out compensation of more than $55 million to customers for cases where offset accounts were not offsetting correctly \u2013 and that was chiefly only to people who discovered a problem and asked about it.<\/p>\n Fifty-five million dollars in compensation is what banks have so far admitted to getting wrong \u2013 but ASIC says the real number could be a lot bigger. Several banks couldn\u2019t even reliably tell them who had asked for an offset account in the first place, let alone who had lost money on one that hadn\u2019t been set up or linked correctly, or even set up at all.<\/p>\n An offset account is a transaction account linked to an eligible home loan that is designed to reduce the amount outstanding on the loan used to calculate interest. Offset accounts, when set up correctly and used well, can significantly decrease your interest costs over a lifetime.<\/p>\n<\/p>\n Even after a mortgage could be paid down outright, many Australians approaching retirement choose to keep their money in an offset account \u2013 rather than closing the loan down entirely \u2013 so they can have access to credit in their later years that might otherwise be difficult to get or even be inaccessible.<\/p>\n According to the report, in March this year Australians held $349.1 billion in offset accounts, a number that grew by an enormous 28 per cent over the past two years.<\/p>\n Yet, with this growth, there is clearly a job to be done in properly enabling these accounts and checking that they are doing what they\u2019re supposed to do \u2013 because many are not.<\/p>\n I sat down this week with the new chair of ASIC, Sarah Court, to unpack the problems with offset accounts on the Prime Time podcast. She broke the failures down by type.<\/p>\n \u2018A number of the banks really struggled to identify when offset accounts had been requested in the first place.\u2019<\/p>\n Sarah Court, chair of ASIC<\/p>\n \u201cOf the significant failures we found, 55 per cent were cases where the bank had opened the offset account but not linked it to the home loan. In another 22 per cent or so, the offset account wasn\u2019t opened in the first place. And in some other circumstances, the account was eventually linked, but not in the timeframe the customer was expecting.\u201d<\/p>\n The written report ASIC published this week, called \u201cOffsets, out of mind\u201d, goes further on the cause. It found that 86 per cent of failures came down to plain manual error, such as a staff member misreading an instruction, entering the wrong account number or missing a step when a loan was refinanced.<\/p>\n It also found that banks are bad at catching their own mistakes: 77 per cent of the failures that banks eventually reported went undetected until ASIC forced the data out of them. One bank had a report specifically built to catch broken offset links that had sat unreviewed for almost five years.<\/p>\n Editor’s pick \u201cWe asked the banks: how can you guarantee that these accounts are all being linked?\u201d Court says. \u201cWe were disappointed, I think it\u2019s fair to say, with some of the responses we got. A number of the banks really struggled to identify when offset accounts had been requested in the first place.\u201d<\/p>\n The report singles out that offset accounts are frequently going wrong when a customer is refinancing and coming off a fixed rate. These are the moments when accounts most often come unstuck because many banks automatically delink an offset account when a loan changes and expect the customer to separately ask for it to be relinked.<\/p>\n The most challenging reality of this problem is that it\u2019s hard for people to see it and know that it\u2019s not working. Most people set up their loan repayment amounts based on their minimum payment requirements. These are usually set by the loan amount, terms and interest rate, not by how much they have to pay when the offset balance is taken in.<\/p>\n So the amount leaving your account each month doesn\u2019t usually change when an offset account fails \u2013 making the failure almost impossible to notice.<\/p>\n There\u2019s no red flag on your statement, and no notification in your inbox. You have to go looking for whether your home loan and offset are in place and working together to know.<\/p>\n And going looking isn\u2019t as easy as it should be. Half of the banks ASIC reviewed don\u2019t even show their customers, in their app, how much interest their offset account has saved them. That information shows up only in a statement.<\/p>\n \u201cSometimes it can be really hard for customers to even check whether their offset account has been linked,\u201d Court says. \u201cYou have to do a bit of detective work. We\u2019re very reliant on the banks doing the right thing behind the scenes.\u201d<\/p>\n Part of that comes down to the way in which many banks are run. Home loan teams and everyday transaction account teams often run on completely separate systems, with completely separate goals, KPIs and reporting. So, linking the two parts of the same bank can be a manual process, handled by people, with nothing automated to catch errors and issues.<\/p>\n Yet while clunky systems might explain how the mistakes happen, they don\u2019t explain what happened next. The report found that some banks investigated and compensated customers only after receiving complaints, with one bank telling ASIC it has no process to check routinely for errors \u201cunless there is an associated customer complaint\u201d.<\/p>\n I asked Court directly whether it\u2019s fair that consumers have to fight for something they already filled out the forms for. \u201cI would be hoping there\u2019d be very few, if any, scenarios where a customer is told their account has not been linked without the bank very promptly dealing with remediation,\u201d she says.<\/p>\n \u201cWe\u2019re not seeing resistance to paying compensation. Where a bank has failed to deliver on its promise to a customer, it is completely incumbent on the bank to promptly remedy that.\u201d<\/p>\n ASIC named all eight banks reviewed \u2013 AMP, ANZ, CBA, Credit Union Australia, HSBC, ING, Macquarie and Westpac \u2013 but every case study in the report is anonymous, and Court would not attach specific failures to specific banks when I asked.<\/p>\n \u201cI think it\u2019s fair to say some of them are performing better than others,\u201d she says. \u201cHaving said that, if I look at the $55 million that\u2019s been remediated, that is spread across a wide number of banks. So it is clear that across the board, all banks have some challenges.\u201d<\/p>\n Editor’s pick So, should you worry? Court says it\u2019s wise to be vigilant, which is regulator-speak for \u201cdon\u2019t panic, but don\u2019t assume you\u2019re fine either\u201d. And if that\u2019s the case \u2013 how do you check?<\/p>\n First, open your online banking app and look at your offset account and your home loan side by side. Check if the offset account is linked to that loan.<\/p>\n Second, check it\u2019s linked to the right loan, particularly if you\u2019ve refinanced, switched products or come off a fixed rate at any point. Third, pull up a recent statement and see whether the interest you\u2019ve been charged looks like it\u2019s calculated on your loan balances minus your offset balances, not your full loan balance alone.<\/p>\n If anything makes you feel concerned, call your bank. Ask them to confirm \u2013 in writing, by email or secure message \u2013 that the account is linked, has stayed linked, and is reducing your interest the way it\u2019s supposed to.<\/p>\n If the bank can\u2019t or won\u2019t give you a straight answer, and you\u2019re worried that there\u2019s an unsolved issue, you can report it directly to ASIC through its website to escalate things.<\/p>\n Bec Wilson is author of the bestseller How to Have an Epic Retirement and the newly released Prime Time: 27 Lessons for the New Midlife<\/a>. She writes a weekly newsletter at epicretirement.net<\/a> and hosts the Prime Time<\/a> podcast.<\/p>\n Advice given in this article is general in nature and is not intended to influence readers\u2019 decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.<\/p>\n Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n Remove items from your saved list<\/a> to add more.<\/p>\n![\"Banks](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/08\/fb1a1f08b925e6a9c3b87ff3e6a51bfeb0b3e600.jpeg\")
Banks are bad at catching their own mistakes, with 77 per cent of the failures banks eventually reported going undetected until ASIC forced the data from them.Ryan Stuart<\/p>\n![\"ASIC](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/08\/1c0fe54af19f234dcd5fcd44bf0637ec3bd74171.jpeg\")
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\u201cWe were disappointed,\u201d said Sarah Court, chair of the Australian Securities and Investments Commission.Edwina Pickles<\/p>\n![\"ASIC](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/08\/7ee3e22b59b5b6a952da8616c5ee6d60744c23ac.jpeg\")
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