Macquarie Bank $14 million fine savings account welcome offer, Digi Mart USA News (Australia): Macquarie Bank is facing a $14 million fine after admitting it failed to accurately advertise its welcome offer to new customers who opened savings accounts.
In a statement released on Wednesday, Australia’s financial watchdog, ASIC, alleged the bank’s advertisement for a welcome variable rate and a bonus between December 2021 and September 2022 was misleading because it could have led customers to believe the bonus was paid on top of the welcome rate.
However, the welcome rate operated as a fixed rate rather than running in addition to the standard rate during the four-month promotional period, meaning customers expecting a bonus would not actually receive one.
As interest rates increased in 2022, the initial margin between the standard rate and welcome rate of 1.1 per cent per annum could narrow or disappear. If the standard rate rose above the welcome rate, customers’ rate only increased to match the standard rate.
Macquarie Bank admitted it had breached the Corporations Act 2001 and said it would not contest the findings put before the NSW Supreme Court, saying it expects to pay a $14 million fine.
In a statement issued after ASIC’s findings, Macquarie acknowledged customers may have felt misled if they expected to see a bonus margin over the standard rate and said the wording on its website may have caused “confusion.”
“We know customers value our straightforward savings offering, where we pay a leading interest rate without conditions or monthly fees,” Macquarie’s head of banking and financial services, Ben Perham, said.
“Our customers rightly have high expectations of us, and although ASIC has acknowledged our actions were not deliberate, we should have better explained on our website how the Welcome Rate would be applied and we apologise for any confusion caused.”
He said the bank had already paid $8.8 million in compensation to nearly 40,000 impacted customers.
ASIC Commissioner Alan Kirkland said banks had a responsibility to “get the basics right” and said Macquarie’s advertisement for its welcome offer fell short of these standards.
“This wasn’t just unclear wording. Macquarie’s systems and controls were not rigorous enough to identify the risk that customers would misunderstand how the Welcome Rate worked,” he said.
“At a time when Australians are contending with cost-of-living pressures, consumers deserve clear information about savings rates and the financial benefits they are promised. Customers should not have to scrutinise every transaction to check their bank has paid the correct interest or charged them correctly.”
In a separate statement, also issued on Wednesday, ASIC urged Australians to make sure they were receiving the correct savings rate from their bank.
“Banks need to make it simple for customers to understand what they have been promised and then deliver on that promise. If a customer qualifies for a particular interest rate, they should receive it,” the regulator said.
“If the conditions are too complex or difficult to decipher, customers may miss out on interest they could otherwise be earning.”
