Edward Tseng is not your typical homeowner. For one thing, he recently paid off the entire $85,000 mortgage on his home. For another, he figured out that the bank actually owed him money.
"I know they should refund me $300 and that's how I challenged the bank," he said.
Tseng had decided it was foolish to keep paying nearly 5 percent interest on his home loan when he was earning only 1 percent interest on his savings account. So he paid off the loan with his savings and came out ahead.
"It's a big relief, I have to say. It's a nice feeling," he said.
However, when he received his final statement from HSBC Bank, Tseng's training as an accountant kicked in. Among the blizzard of numbers, he noticed the bank had charged him for a full month of interest after he had paid the loan.
"Obviously that's wrong," Tseng said.
So he sat down and did a bunch of calculations. He figured out his daily interest rate, multiplied it by the number of days he had used the loan and found he owed $39 in interest. Yet, HSBC charged him $345. He notified the bank, but he says no one would listen.
"They seem to be impatient with me," he said.
Eventually, HSBC did its own calculations and sent Tseng a letter stating that "regrettably... no back interest is owed." That was frustrating for a guy who knows his numbers.
"They charge you by the day and when I paid off, I should be charged by the day also, right?" Tseng said.
So he called 7 On Your Side and we contacted HSBC. The bank agreed to take another look at the numbers and within days, Tseng received a letter of apology. He had been right all along, and he received a $297 refund.
HSBC tells 7 On Your Side, "We are committed to ensuring that all of our customers receive a positive experience with each and every interaction."
"Actually, most people can do it if they really sit down and think about it," Tseng said.
Tseng says you do not have to be a math whiz to spot a bank error. The hard part is when the bank disagrees.
"To the bank it's such small money, and I won," he said. "You're not being treated fairly, definitely give 7 On Your Side a call."
HSBC said in its letter that this sort of error is not typical and that this case has now been brought to the attention of bank management.
If you would like to try it for yourself, see the formula below that Tseng used to calculate the interest due back.
Formula to calculate monthly interest owed:
Multiplied by interest rate
Divided by 365 days
Times number of days the loan was used in that month
Example principal balance $85,000
Interest rate = 5%
Number of days loan used in the month = 15
Formula is $85,000 x .05 / 365 (days in a year) x15 (days used) = $174.65