Bank error in your favour. Collect $1300

A few weeks back, our neighbour noticed a letter in our mail box at Paradise Beach, which was unusual because we’d arranged for our mail to be re-directed when we moved to Cobar.

The envelope confirmed that the letter was from an insurance company, with whom we had no policies so we figured it was junk mail but, in the spur of the moment, we asked her to open it and relay the contents.

As it turned out, we were even more convinced that it was spam because the letter said that the insurance company owed us money. We had almost decided that she should bin the letter when she suggested taking a photo of the contents. And so began a series of events that we couldn’t have imagined.

The letter stated, in part, “It has come to our attention that as a result of a lack of clarity in our policy wording explaining how we calculate your premium refund, you did not receive the full refund we owe you for your Five Year Mortgage Repayment Insurance Policy. We apologise for this error which we are now correcting”. It went on to say that we’d receive a refund in the form of a cheque “within 15 business days”.

And that was it. No pleading for forgiveness, just a matter of fact apology that seemed more “By the way we owe you money” than “We’re very, very sorry and we promise that we’ll never do it again”. Unfamiliar with insurance company refunds and still unconvinced that the letter was genuine, we were pleasantly surprised to ring and hear that it wasn’t a hoax. So Nigel gave them our correct address to forward the cheque.

Just to fill in some details, almost five years ago we applied for a home loan and were “encouraged” to take out mortgage insurance (one of those situations where you don’t want to rock the boat so you basically say Yes to everything). A year later – and safely “locked in” to our new cheaper home loan – we cancelled the policy and received a refund. Apparently there was a shortfall in the refund and after some encouragement from ASIC, we were being paid the shortfall plus interest.

Now assuming we aren’t the only customers that this has happened to, it begs the question, “What happens when refund letters aren’t sent to the correct address and the cheque that follows is simply lost in the mail? Wouldn’t it be better to check the address with the bank first or, better still, ask for the bank account details and just deposit the refund?

A phone call to ASIC revealed that insurance companies aren’t allowed to ask banks for updated addresses or bank accounts. They can only send mail to the old address that’s on file. If the cheque never makes it to the customer, the money ends up held by ASIC in an “Unclaimed money” account.

Now we all know that it’s wise to check for unclaimed money from superannuation accounts as well as previous employment but if you don’t realise that you were ever refunded the wrong amount by an insurance company, then why would you ever think to investigate? ASIC agreed and confirmed that a lot of people never receive these payments. In fact there’s around $1.1 billion in lost shares, bank accounts and life insurance.

When you consider that some cases might go on for years before a resolution is achieved it’s easy to see how refunds might go astray. So don’t assume that it will never happen to you…… or that you should only check once. Our refund shortfall occurred four years ago.

We did eventually receive a cheque to the correct address and, on the 23rd of July, deposited it at our closest branch in Dubbo (around 300 kilometres away). Then, 4 days later, the cheque was dishonoured. Another phone call revealed that changing our address on file led to an error where the cheque was cancelled.

Another phone call and this time the company has agreed to deposit the refund into our account, some time around “next Wednesday” – avoiding yet another 600 kilometre round trip. Considering the very first letter was sent on the 24th of June, we’re not holding our breath.

Apparently, finding unclaimed money is easy and you can use ASIC’s free search facility on their Moneysmart website ( ) and after our experience, I’d encourage everyone to do just that. You never know!!


So whether by intention or incompetence (Sorry. That was nasty wasn’t it? Nigel is so much more gracious than I could ever be!) and despite our jumping through the required flaming hoops of providing a screen shot of a bank statement showing the account name,  account number, BSB and address plus policy number, DOB, eye and hair colour, preferred brand of tooth paste…..) Wednesday’s deposit into our bank account never eventuated.

However, on Friday a second cheque for the same amount arrived in the mail. We probably should be happy but my fear is that this cheque will also be dishonoured. At this stage we have no idea whether the 600 km round trip would be the final “hoop” in our 4-year refund or not so we’re going to do nothing while we wait and see……..

Sure enough! On the 13th of August, the exact same amount of money was deposited into our bank account.

So, in summary, we received a cheque for $1,328, which was promptly dishonoured after we tried to bank it. Then we asked for a deposit in lieu of driving 300 kilometres to the closest bank branch (Dubbo) again and were told “Yes that’s fine” and then, shortly afterwards, “No. Sorry, we don’t do cheques after all” (okay Yes I paraphrased it).  Then we received another cheque for $1,328 which we’ve filed away – possibly to be framed. Then another $1328 was deposited into our account.

Did I mention that this same insurance company may have been mentioned in a recent Four Corners report?

6 thoughts on “Bank error in your favour. Collect $1300”

  1. A new fan of your blog Kaye, I only found it because you’d mention Ivanhoe, we’re calling through that town on our annual holiday via towns like Dubbo, hillston, Ivanhoe, Cobar upto Bourke then over to lightning Ridge onto quirindi then head home to the Gong ( Wollongong) regards kev. Oh what’s the road like between Ivanhoe and Cobar.


    1. Hi Kev. Great to hear from you. Don’t go near the Cobar/Ivanhoe “wool track”. You could possibly try coming into Ivanhoe from Wilcannia. It depends what car you have because it’s not tarred all the way yet. Safe travels. Cheers Kaye


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