All Topics / Legal & Accounting / Interest in advance – St george bank unable to proces in time -legal options

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  • Profile photo of ankitjainankitjain
    Participant
    @ankitjain
    Join Date: 2006
    Post Count: 27

    Hi, I have been paying interest in advance for the past four years on my property. I pay every year near the end of the financial year. This year I did the same – I fixed my home loan via  my bank stgeorge bank. I did this well within time via a st George bank branch –they put in the application and submitted it on my behalf. I have sufficient money in my account all the time (another st George bank account) to take the money out of.

    After that I rang up st George to confirm that everything is in place (at the beginning of the month -June) the lady on the phone told me everything was in place and money would be taken out on the 28th June. I rang up 29th June morning and they said sorry –system error it will get taken on 29th June night . The daily routine continued till the 1st july. Still the same message from a different person on the phone everytime.

     A)     I have an email from st George bank teller that they had a system error and this will get corrected and correctly dated.

    B) Now st goerge bank writes to me saying that they were unable process the interest in advance –sorry.

    My loss : Given this is clearly St George banks error that are my legal options –  It would cost me approximately a 10000 tax hit because of this error on part of the bank.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Don't like your chances. Banks have no obligations to lend money or to meet deadlines. Nevertheless I would contact their complaints department and talk to them about it.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of djjkdjjk
    Participant
    @djjk
    Join Date: 2010
    Post Count: 87

    Rather than wasting your time fighting the bank (because they've only caused you an consequential loss and owe you nothing),  your best bet is to argue that the interest deduction was ‘incurred’.  It was likely incurred for tax purposes at the point the St George Staff member confirmed it would be deducted.  You had a definate committment at that point. 

    Get an accountant to discuss this with you as I don't know the full story of the banks delay.  Also, phone the ATO on 132866 and make an anynomous enquiry to check this out further.

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