New Zealand's financial regulator is warning banks that offer offset mortgages to take notice of action in Australia.The Australian Securities and Investments Commission (ASIC) said its review had found customers might have been unknowingly paying more interest than they should because some banks had failed to properly manage offset accounts.ASIC reviewed the offset practices of eight banks, representing more than 70 percent of Australia's A$2.5 trillion home loan market.It said, while practices varied significantly across the banks, it found weaknesses in how all banks set up, monitored and managed offset accounts, resulting in some customers missing out on promised savings.Australian banks are the parent companies of Westpac, ANZ, ASB and BNZ.Michael Hewes, director of deposit taking, insurance, advice and credit at the Financial Markets Authority, said it was encouraging banks in New Zealand offering offset products to consider ASIC's findings and reflect on the robustness of their controls to prevent similar harms impacting their customers."The Conduct of Financial Institutions regime requires Financial Institutions, including banks, to treat customers fairly and have effective policies, processes, systems and controls in place to do so. Additionally, the Credit Contracts and Consumer Finance Act requires lenders to provide clear disclosure of loan terms and to charge reasonable fees and interest."Our monitoring of financial institutions includes looking at the products they offer. One of our current regulatory priorities is focused on product design, ensuring that, when developing new products or redesigning existing ones, financial institutions prioritise consumer needs while also considering the capabilities and limitations of their systems and processes."This follows thematic monitoring we undertook last year which highlighted the risks posed by legacy systems and a reliance on manual controls."He said the FMA had previously taken action when financial institutions had failed to deliver products as promised.Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make and spend money