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Bank inaccuracies are now being
uncovered
North Shore Times
North Shore's The Interest Savers is uncovering
mistakes in bank statements, with the latest
discovery being a $28,000 overcharge on a motor
dealers account.
This sum was likely to compound to $97,000 when
interest was applied to the error. The Interest
Savers General Manager John Scilly said.
Mr Scilly said the overdraft was not large,
rarely exceeding $150,000 and the businessman
admitted that without The Interest Savers program
he would not have discovered the mistake.
The program was developed by North Shore based
Kevin Nowland, a former banking executive, who
during his time with the bank had discovered more
than $22 million in overcharges.
"The fact that the bank was not interested
in refunding the money ultimately led to the
formation of The Interest Savers," Mr Scilly
said.
Being Windows based, the program is very easy to
use and it takes no longer than 10 minutes per
month to check an overdraft statement.
"Home loan statements can also be checked
with the software, as can commercial loans, lines
of credit, trust accounts and deposit
accounts."
Mr Scilly said more than 300 accounting firms
were using the program and offering the service
to their clients.
"The Interest Savers' software was designed
specifically for small business so they can check
the accuracy of their overdraft statements,"
he said.
"It costs $495 and is tax deductable as a
business expense."
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Smart
software picks up your bank's errors By Alan
Dick
The Land.
Whatever disagreement farmers might have with
banks, they tend to take it for granted the banks
will correctly calculate interest rates on loans
and overdrafts.
"But it ain't necessarily so", to quote
a song from a musical recently played in Sydney.
In fact there's quite a high likelihood of
mistakes, according to a Sydney company, The
Interest Savers Pty Ltd, which has developed
computer programs to allow quick and easy checks
of bank interest calculations.
The Interest Savers Pty Ltd was featured on ABC
television's "Four Corners" in March in
a program called "Banks Behaving
Badly".
The companies head, Kevin Nowland, says examples
of interest underpayments by banks reported to
The Interest Savers include a $60,000 shortfall
for an insurance broking firm.
Another client found the bank's calculations had
been $14.98 higher a month than calculated by The
Interest Savers program, and would have cost him
$3955 over 22 years.
In this and many other cases banks have corrected
the errors when confronted with the evidence, but
sometimes they have not.
Mr Nowland says one of the latter situations
involves people, including many farmers, who
obtained foreign currency loans in the 1980's
when banks persuaded them to borrow in Swiss
francs at much lower interest rates than applying
in Australia.
They often failed to adequately warn people of
the dangers of exchange rate fluctuations, and
when the Australian dollar declined drastically
against the franc, people were stuck owing often
twice as much as they expected.
Mr Nowland says the Government charges 10pc
withholding tax on interest repaid overseas, and
one bank added the tax to interest charges.
However, when the Australian Tax Office indicated
the tax should not be collected where a loan was
secured by a mortgage on a property, the bank
still refuse to return the witholding tax
component to borrowers.
On a $1 million loan at 10pc interest, the
witholding tax would represent $10,000 per annum,
Mr Nowland said.
Mr Nowland was a banker for 14 years, but left in
1992. At the time of leaving he was concerned at
the high mistake rate.
He developed four separate interest check
computer programs - for overdrafts, commercial
loans, trust accounts and deposit accounts -
which run on IBM-compatible computers. He has
sold more than 2000 programs Australia-wide,
including 300 to rural areas.
He has yet to receive feedback on specific
examples of farmers being overcharged on
interest, but he see no reason for the mistake
rate to be any different for them.
Mr Nowland says anybody who can use a keyboard
can use the programs. They simply insert basic
loan information then press "calculate"
and the program then displays and stores the
daily balances and interest calculations and
compares the total with interest charges shown on
the bank statement.
If there is a discrepancy, a print out can be
made for presentation to the bank.
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Calculated
to Confuse By Anne
Lampe
Sydney Morning Herald
We have received a flood of calls from readers
mistrustful of their banks' loan interest
calcultions on mortgage and overdraft accounts
and seeking an independent check by Kevin Nowland
of Interest Savers.
One reader makes the observation that bank
account holders can be in a better position to
trust the bank's arithmetic if, instead of just
including a total interest figure for the month
or the quarter, the bank sets out, in one or two
lines, just how the figure is arrived at.
A simple statement such as "the daily
interest rate is 6.5% per annum, or so much per
day, on this deposit for 28 days"' or
"6.5% for 20 days and 6% for 8 days"
can assist most statement readers in th dark
about how the bank calculates their interest
debits and credits and whether the figure is
correct.
The reader, who has a deeming account with a
major bank, says he routinely checks the interest
paid on his account and it often does not add up
to the figure he calculates on his last known
interest rate.
When he queries the banks figure, he is told that
the applicable interest rate has changed during
the month and that the discrepancy is explained
by the deposit receiving X % and Y % for the rest
of the month, with the change determined at the
banks dicretion.
No wonder people have clogged our telephone lines
in the past week.
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A
matter of interest
My Business Success.
When was the last time you checked the interest
payments on your bank statement ? Chances are
you're being ripped off. Fortunately, a computer
program called "Interest Savers" now
makes checking easy.
After 15 years working for the banks, Kevin
Nowland was a troubled man.
"I had identified $22 million worth of
overcharges in a singlr year," he says,
"but the banks' hierarchy didn't seem too
worried."
Why would they ? After all, there aren't many
gift horses which have such a large mouth. And
this was just as one of the smaller regional
banks. Kevin estimates that over the past five
years banks have overcharged Australians in
excess of a billion dollars.
"Our latest research shows that in at least
90 per cent of cases, the original home loan
repayments are wrong."
And where there was a mistake, it favours the
banks almost every time he says - whether it be a
home loan, commercial loan or business overdraft.
A coincidence ? Who's to tell, but either way you
can correct it. If you're able to identify the
miscalculation and document it conclusively, they
will refund the money promptly and without
debate. This is where a program like Interest
Savers becomes invaluable.
It took Kevin nine months to turn
"fundamental mathematics" into a
user-friendly program that works out exactly how
much you should be paying.
"You simply key in the start date and end
date of the period you want to check," he
says. "You then add the opening balance as
per your bank statement, the interest rate and
then the daily balances when transactions take
place throughout that period."
On a home loan, this would include just a few
numbers per month. For an active business'
overdraft, it might run at 25 to 30 numbers. But
the more numbers, the more chance of a mistake
and, considering it's only a few extra minutes a
month, it hardly seems a sacrfice. After all,
what price for peace of mind ?
"Once these numbers have been typed in, the
program calculates what you should be paying and
compares it to the statement. I can tell you this
comparison has shocked many people."
Some 2000 copies of the program have been sold
with two of the "Big Six" accounting
firms already on board.
"Interest costs for small business are a big
part of their overall expenses and yet many have
never bothered to really check whether they are
being charged accurately," adds Kevin.
"Now that testing is starting to occur,
there are many mistakes being found."
Remember, a small mistake at the beginning of a
25-year loan can balloon into something far more
substantial as it compounds. For example, a $399
overcharge can grow into a $3500 black hole if
not corrected earl
- Some of the savings...
- An insurance broking firm
with hundreds of trust accounts found
that every account was being credited
with the lowest possible interest rate.
Over a 12-month period, this financial
foible added up to a hefty $60,000 which
was promptly credited to their accounts.
- On a slightly smaller
scale, a doctor with a loan from one of
the major banks found that in the last
six weeks before the loan was paid out,
there was an overcharge of $1500. This
was printed out and when the bank saw the
mistake, it was immediately rectified.
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Don't
Take The Banks Word!
Published by The
Institute of Chartered Accountants in Australia
Charter.
Have you ever wondered if your interest charges
on your overdraft or loan accounts are correct ?
What about the interest earned on your deposit or
trust accounts ?
Are you like the vast majority of borrowers who
take the bank's word and hope that, in your case,
the figures are correct ?
A growing number of bank customers have been
checking the bank,s calculations only to find
that the banks have been making mistakes -
significant mistakes that are proving costly to
the customer.
It's a tedious exercise to check the calculations
on the daily balances for each bank account,
especially when different rares of interest apply
to different balances under different
circumstances. But it can prove to be fruitful as
one company recently discovered.
A medium sized professional group that decided to
check interest they were receiving on their trust
accounts found that there was a mistake of almost
$60,000. When confronted with the evidence the
bank credited the group with the amount in
question.
Kevin Nowland of The Interest Savers Pty. Ltd.
has developed an interest monitoring program
called The Overdraft Saver to check on
overdrafts, term loans, commercial loans and
deposit accounts. The program is user friendly
and takes an operater approximately five minutes
to check on a monthly statement.
The Overdraft Saver checks on the monthly
interest, maintains a record of daily balances,
interest rates and charges ( or earnings ),
determines the cost of being over the overdraft
limit, records the interest earned when the
account is in credit and allows the user to go
back over as many years as records allow. An
operator should be able to check 12 months of
calculations in one or two hours.
Kevin Nowland hold a Masters degree in accounting
and finance and has 14 years' experience in
banking and finance, four years in the computer
industry and four years as a senior lecturer in
financial management. He says that his
discussions with those companies that have
decided to check on the bank's calculations have
revealed errors ranging in amounts up to $60,000.
In all cases, the banks have credited the clients
with the amount of the errors.
Whats is surprising, he says, is that quality
control and pricing checks on goods ordered and
received and on services used but never carry out
checks on one of their most regular expenses -
interest ( or interest income ).
The Overdraft Saver has been designed for the
accountancy profession to allow all of a firm's
clients and their data to be stored in the
program. An accountancy firm is thus able to
offer an additional service to their clients.
The Interest Savers has also developed a home
loan monitoring program called The Home Loan
Saver. Kevin Nowland says a client recently
informed him that he used The Home Loan Saver to
calculate his repayments before negotiating a new
home loan. The banks calculated repayments were
$14.95 greater than the figure the client had
calculated. The bank initially refused to admit
its mistake but when confronted with the evidence
agreed it was wrong. This was a mistake of $180
per year for 22 years.
Kevin Nowland says that based on his banking
experience and case studies, he believes the main
areas of error are the applications of incorrect
interest rates by the banks ( regardless of th
rate shown on the statement ) and the incorrect
calculation of repayments for housing loans.
Both programs are being used throughout Australia
and New Zealand by accountancy firms, solicitors,
financial advisers and a variety of businesses.
Both programs have featured nationally on the
Today Tonight television program. The financial
presenter of the program, David Koch, revealed
that he decided to check on his personal bank
account he discovered a mistake of approximately
$4000. The bank soon credited him with the amount
in dispute.
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Checking
Up on the Banks Published
by The Institute of Chartered Accountants in
Australia
Charter.
In March of this year the ABC's Four Corners
television program presented a program titled
'Banks Behaving Badly' in which they covered many
cases of customers having being treated poorly.
The public reaction on a nationwide basis was
overwhelming to say the least, with radio morning
and afternoon programs throughout the nation
devoting air-time to the subject.
During that program, Four Corners featured a
company called The Interest Savers Pty Ltd as
providing a solution for bank customers who have
experienced difficulties or who may have doubts
as to the validity of their bank interest
charges.
The ABC's switchboard was jammed by callers
requesting the contact number for The Interest
Savers. In fact, the number of requests was so
great that the ABC connected The Interest Savers
to their home page on the internet to assist in
handling the number of enquiries.
The Interest Savers Provide a range of software
programs that check on the bank's interest
calculaltions. The programs are extremely easy to
use and have been designed for the 'non-computer'
user.
The programs currently available include:
The Overdraft Saver - The Trust Account Saver -
The Commercial Loan Saver - The Deposit Account
Saver
Kevin Nowland of The Interest Savers say anyone
who can use a keyboard can use the programs. The
user inserts the interest rate (and any penalty
rate), the opening balance and the limit, the
daily balances when the changes have occurred,
the interest rate for credit balances, and then
press 'calculate'.
The programs then display and store the daily
balances and interest calculations as well as the
'total' for the period being checked. This is
then compared to the interest charge shown on the
bank statement.
If there is a discrepancy with the banks
statement figure, a print-out can be generated
showing the daily calculations and total for
presentation to the bank
It is normally a tedious exercise to check the
calculations on the daily balances for each bank
account, especially when different rates of
interest apply to different balances under
different circumstances. But now it can be done
in a matter of minutes, and it may prove to be
fruitful as many companies are discovering. One
major bureau is claiming a 93 per cent error rate
in accounts that they have investigated.
Kevin Nowland holds a masters degree in
accounting and finance and has 14 years'
experience in banking and finance, four years in
the computer industry and four years as a seniour
lecturer in financial management. He says that
his discussions with those companies that have
decided to check on their bank's calculations
have revealed errors ranging in amounts up tp
$60,000. In all cases, the banks have credited
the clients with the amount of the errors.
Mr Nowland says that what is surprising is that
businesses perform quality control and pricing
checks on goods ordered and received and on one
sevices utilised but never carry out checks on
one of their most regular expenses, that of
interest ( or interest income ).
The Interest Saver programs have been designed
for the accountancy profession to allow all of a
firm's clients and their data to be stored in the
program. An accountancy firm is able to offer an
additional service to their clients as well as to
check on their own accounts.
The Interest Savers has sold over 2000 programs
and have more than 200 accountancy firms using
the programs, including one of the world's
largest firms.
Mr Nowland says that based on his banking
experience and case studies, he believes the main
areas of error are the application of incorrect
interest rates by the banks ( regardless of the
rate shown on the statement ) and the incorrect
calculation of repayments for housing loans.
The Interest Savers programs have also featured
nationally on the Today Tonight television
program. The financial presenter of that program,
David Koch, revealed that when he decided to
check on his personal bank account, he discovered
a mistake of some $4000. His bank later credited
him with that amount.
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Watch
the bank while it's watching you. By Anne
Lampe
Sydney Morning Herald
Ever had a dispute with a bank over it's
overdraft balance and charges ? For anyone who
does not have a higher degree in mathematics,
overdraft and term loan interest calculations and
balances owing are very difficult to monitor
The interest rates charged vary, so does the
daily balance and there are charges and lumpy
payments.
If more than the agreed amount is withdrawn,
penalty rates hike up th effective interest rate.
In the case of the State Bank, the penalty is up
to 6 per cent on top of the stated rate
applicable at the time
Once the account balance is again within limits,
the ordinary rate should apply from that date.
It is a complex exercise to check whether you are
paying what you owe the bank or have been charged
too much. As a result, most borrowers have no
option but to trust the bank. But given that
mistakes occur, should you trust the banks
calculations.
Coming to the rescue of hundreds of thousands of
bank customers who find themselves facing the
dilemma id former banker, Mr Kevin Nowland, who
is marketing a home loan mortgage interest
monitoring package and who has developed a
similar software checking program for overdrafts
and term loans called the Overdraft Saver.
The product is designed to give banks which get
there sums wrong dyspepsia. For too long when a
dispute arose about the calculation of interest
and balance, it could be an expensive exercise to
get the calculations checked.
The borrower had to take the bank's word that the
figures appearing in the bank statement to an
accountant for checking, at a cost of perhaps
$200 per hour.
In one case involving the State Bank - due to go
to court at the end of July - the disputed amount
of the interest bill on a $3.5 million loan is
over $600,000. And a number of calculations are
claimed to be incorrect and in the banks favour.
Business borrowers cannot seek the help of the
Bank Ombudsman if they suspect that a mistake has
been made in an overdraft or term loan account.
The Ombudsman's office cannot adjudicate business
disputes.
That leaves only the court system as a way of
obtaining redress. And once your business is in
trouble and the bank has moved to seize your
assets or claim on the security, who has the
money to take on a banking giant with a massive
legal team ?
Mr Nowland argues that the Overdraft Saver is the
answer.
And his view is backed up by 14 years' experience
in banking and finance, four years in the
computer industry and four years as a senior
lecturer in financial management and accounting,
specialising in small business management.
The program, designed by Mr Nowland, was written
by an independent software company. It is a
user-friendly software package which checks on
monthly interest charges, maintains a record of
daily balances, interest charges and rates,
determines the number of days within the limit
and outside the limit, and has the capacity to
examine charges levied over a period of months or
years.
As it's extremity it can check calculations going
back seven years. All you need is a copy of all
your statements and details of interest rates
applicable to the loan, and any alterations and
when they occurred
The statement amounts should have been reconciled
with deposit and withdrawal transactions records
to ensure that someone else's transaction has not
been slipped through your account, and that the
transaction amounts on the statement are correct.
The program does not rest. It checks the daily
balance and interest charged, based on the
interest rate that is supposed to be charged. It
might be that the interest charged should be $241
and your statement says $275. Then, you can go to
the bank for an explanation.
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Check if
bank overcharges in 3 minutes. Bill Harcourt
The Manly Daily
A simple, free software program called the Home
Loan Saver allows you to check if your bank is
overcharging you.
It also allows you to find out the best method of
repayment and to assess the effects of changes in
interest rates.
Ex-banker, local resident Kevin Nowland, who was
once overcharged, has written this simple, quick,
three-minute program.
The Home Loan Saver is free to customers who are
customers of accountants, real estate agents etc.
sponsoring the program.
Any business wanting to become a sponsor can
phone 9413 4986.
Mr Nowland has also produced another computer
program, The Overdraft Saver, which allows the
user to check their monthly interest charges and
to maintain a record of daily balances, interest
charges and rates and determine the number of
days within the overdraft limit and outside the
limit.
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Fiddly
statements checked in a flash. By Anne
Lampe
Sydney Morning Herald.
You get an annual statement for your home loan
account listing interest charges, repayments and
a running balance of what you owe the bank. But
how do you know if the figures are correct or
whether a mistake has been made in the interest
calculation or the balance ?
You don't unless you are a maths genius or you
pay a small fortune to an accountant to check the
figures. And, anecdotally, such mistakes are
being made fairly regularly - often to the
borrower's disadvantage
Interest rates on the home loan change. How do
you know the dollar calculations reflect that
change ? Again you don't. Or that the next
interest calculation reflects the timing of the
change ? You receive a pay rise and want to know
to what extent your total home loan cost will be
reduced if you reduce your repayments. Or what
happens if you alter your repayment cycle so that
you make fortnightly rather than monthly
repayments ? Or even weekly repayments ?
The major banks have software programs to work up
these sums quickly but to access them you have to
go to the bank branch. Until now.
Ex-banker Kevin Nowland was overcharged on a loan
account by a bank some time ago. He has seen
other instances of overcharging on accounts
during his banking career, and decided to do
something about it. He has released a sofware
program called The Home Loan Saver, which does
amazing calculations to answer your questions in
a flash.
The Home Loan Saver enables borrowers to check,
in about 3 minutes, their monthly repayment and
interest rate calculations to see whether they
are coorect, determine the best method of
repayment, assess the effects of changes in
interest rates, experiment with different
repayment frequencies, examine the oustanding
balance at any point in time and maintain an
independent record of changes in interest rates.
The user friendly software program responds to
keying in the rate of interest applicable at the
time, the size of the loan, the amount of
repayment, frequency of repayment, term of the
loan and the amount and effect of any changes in
any of these features.
Take the example of a $100,000 home loan with an
interest rate of 9.95 per cent, repayable over 25
years with fortnightly repayments of $417.56. The
Home Loan Saver will tell you that the total
interest paid on this loan over its life is
$171,416.68 and total repayments on the loan will
total $217,416.85 over 25 years.
But if the same loan is repaid at a rate of
$452.59 fortnightly, the borrower will save
$50,080.72 over the life of the loan and the loan
will be repaid in 18 years and 10 months rather
than 25 years.
If the borrower manages the higher fortnightly
repayment of $472, $65,682 is shaved off the
total amount payable and the loan is repayable in
16 years and 9 months.
The program is free to consumers who deal with
selected distribution outlets such as
accountants, unions and real estate agents who
buy the disk and receive multiple copies to give
away to their clients, or it can be bought for
$19.95 direct.
"What the program shows is what ought to be
paid, without all the fiddly things and if there
is a big discrepancy thrown up the borrower can
ask why and have it corrected." Mr Nowland
says.
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