Reinstatement of the Interest Rate was not carried out by the bank

Background

Ms W maintained a housing loan account with Bank A. Ms W had inadvertently delayed in paying the instalment for February 2014 and the bank had increased her housing loan interest rate from 2.40% pa below  Base Lending Rate (BLR) to BLR plus 0%. Upon immediate settlement of her arrears, she requested for the reinstatement of the interest rate to 2.40% pa below  Base Lending Rate (BLR).  Bank A approved her request to revise the interest rate from BLR+0%p.a. to BLR-2.40%p.a. via Supplementary Letter of Offer(SLO) dated February 2014.

Ms W had assumed that the interest rate was revised following the approval by the bank. She discovered in September 2016 that the bank had not revised her loan interest rate. The bank explained that the interest rate was not revised because Ms W did not sign and return the copy of the SLO.  Ms W was unaware that she was required to return the SLO with her acceptance of the terms stated therein. Notwithstanding the abovementioned, the bank had agreed to re-instate  her loan interest rate to BLR-2.40%p.a. in December 2016 after her numerous appeal. However, the bank had declined her request for the full refund of the excessive interest charged from March 2014 to November 2016. The bank had instead offered to refund 30% of the total excessive interest charged, but Ms W declined the offer.

 

Investigation and Findings

A mediation session was held to discuss the dispute matter. Bank A had accepted the fact that Ms W had been prompt in her repayment after she had settled her arrears to date.  Ms W also acknowledged that she was not aware that the SLO must be returned with her acceptance for the bank to revise the interest rate.

 

Settlement

Based on the good track record of Ms W, Bank D had on goodwill consideration agreed to increase the refund of 50% on the difference in the interest charged from March 2014 to November 2016. The offer was accepted by Ms W.