FNB’s One Account shocker
Big bank admits to astonishing, financially-painful blunders – customer fiasco.
Jackie Cameron
31 July 2007 00:00
First National Bank ( part of JSE-listed FirstRand: JSE: FSR) has admitted its much-touted One Account has been giving customers financial problems, but says it is fine-tuning, rather than ditching, it.
Bank errors leading to loan periods expanding and contracting erratically - which in turn suddenly increase or reduce minimum loan repayments - and incorrect interest charges emerged when a customer complained to the banking services' ombudsman.
The customer, accountant Marvin van de Heuvel of Cape Town, was confused over what was going on in his bank account and left short of funds at various times.
He says debit orders were returned, including car repayments - which led to a vehicle being repossessed and a bad credit record. As a result of this poor payment record, he says he can't find work in a finance department.
Van de Heuvel blames FNB for his woes, but FNB says he is at fault for his "history of poor account conduct".
The customer has turned down a "goodwill gesture" of about R30 000 from FNB. Van de Heuvel, in his early 30s, says he wants his name cleared and about R170 000 - which is what he estimates the fiasco cost him.
Meanwhile, there are other FNB clients who have experienced problems with their One Accounts.
FNB's CEO of home loans, Jan Kleynhans, recently admitted to Moneyweb that the One Account has systems' problems and that the bank has been working on ironing them out.
The account, although it looks like a home loan, is not actually managed by the same people and processes as the average home loan, he said.
FNB would not divulge the number of customers affected by One Account gremlins.
So, what went wrong?
Saving cash in a home loan has become a popular alternative for people who want to reduce the amount of interest they'll pay on a debt in the long run. And, if you like, you can pay off a property faster than initially anticipated.
An access, or savings, facility means you can move money in and out of a loan with considerable ease.
FNB has been touting its One Account as a home loan with extra bells and whistles, with people left thinking that if their salary stays in the account for only a few days they will save interest on their home loans
But the inner workings of the One Account are complex. Even FNB admits "some" customers "are experiencing difficulty in understanding" it.
Usually, when you dump extra cash into a home loan, the bank assumes that you will stick to your loan period until you state otherwise, so there is always a minimum you must pay that goes towards steadily wiping out the total debt plus interest.
The bank doesn't usually reduce the number of years it has given you to repay the loan without some discussion with you. Not so in the case of the One Account as Van de Heuvel experienced it.
He converted from a home loan to a One Account in March 2005.
In addition, the bank agrees it calculated an "overcharge of interest" between April and September 2006 of about R3 600. Van de Heuvel thinks he was overcharged about R8 500, and both produce spiderwebs of figures to state their case.
Lessons for others
The One Account is a financial minefield, though the detail on FNB's website makes it all sound very simple and easy to understand.
The bank says it is a "single facility, secured by your home". "It fulfils all the functions of a cheque account, overdraft, personal loans and home loan."
Benefits, claims the bank, include that you can view your overall financial position "at a glance".
This is not how Van de Heuvel experienced the One Account. He still can't understand his financial position "at a glance" - and neither can FNB, judging from its lengthy explanation to the ombudsman.
The repayment options may have been flexible, but with some unexpected nasty twists.
The messages in this include that it is probably simpler, and more sensible, from a personal financial management perspective to keep your home loan separate from your daily spending.
This way you also make it harder to waste the value of your property on items you will barely remember soon after paying for them.
And, if you can't understand what is going on in your bank account, don't delay in contacting your bank manager. Bank systems and their employees can and do, as Van de Heuvel's case shows, get the numbers wrong.
I have about R7000/month available for investment. What would you guys recommend? Shares, property, gold (krugerrands), futures, etc.?
) job with a regular income.
