RAMS Screw Up

My debit card for my offset got mangled up the other day so I called for a replacement.

It came and I have been happily using it for day to day stuff, and then this morning I see that it is actually linked to a loan earmarked for investment rather than the offset.

So do I just pay it down to zero to fix the problem? I'll check today if that would close the account or not.

If paying down to zero closes the account, does paying down to $10 suffice for deductability purposes?

 

We had a similar problem many years ago.

We had a business and our SMSF. It was back in the days of cheque books and both entities banked at the same institution.

We ordered and received a new cheque book for the business. A little while later, we received a letter from the bank stating that SMSF account was overdrawn.

WTF!!! Our Super was in accumulation phase. When we looked closely at our cheque book, we noticed it was in our business name BUT linked to our SMSF account. WTF!!!!

We went straight to the bank as we were concerned we had breached taxation rules.

The bank did their investigations and found out that all the paperwork was correct but they made a mistake.

We asked the bank for a letter that we could give to our accountant/ATO stating they made that mistake.

Then we went through the bank statement with the bank, identified all the transactions that should have been processed against the business and asked the bank to reverse those transactions on our SMSF and re-process them against our business.

Finally, we handed in the incorrectly linked cheque book and requested a correctly linked one.

The bank happily handled the above three requests .

 

Mixed purpose loan now.

 

If it was the bank's fault, I would go to the bank, kick up a stink and get them to sort it out (including a letter admitting fault).

 

Yes they could possibly reverse the transactions.

 

... and have them "hidden" on bank statements, etc so that it "appears" that nothing ever happened (which is most would want).

 

Do you mean the mistaken debit card was linked directly to your loan so every time you used it, it redrew from the loan?

 

That is how I read the OP.

 

They don't know the RAMifications

Its pretty unlikely you'll get a bank to reverse the transactions. They'll prob just transfer it back and inform you its fixed.

 

@D.T. - have you been taking punny lessons from @geoffw?

 

These puns are shear hilarity

 

Hi Terry

Is this the case even if paid back to zero before using the funds? I haven't yet used the funds yet for investment.

Thanks

 

Correct. But loan was virgin. Not used for IP yet.

 

I'm confused - Is the loan balance zero other than the new amounts drawn using the card ? So how does that offset work ? Isnt it just a 0% interest savings account at present ?

Baaaaring that....dont allow the lender to pull the wool over your eyes. They should be able to revert transactions and correct this so it doesnt repeat. No tainting yet. Ewe should be OK.

 

@Paul@PFI - those comments a a tad sheepish.

 

Ha! Ha! Puns a plenty...

It's an IO loan with nothing drawn down until these transactions. They linked the card to the loan directly instead of the offset. I can ask but not sure how they can revert the transactions as they were cash withdrawals plus one at Aldi!

 

If you fully repay the loan and then redraw there would be no mixing

 

Just pay the loan down to $0 or $1 (to avoid closing the loan) and you should be fine.