Macquarie Bank to pay $14m penalty after confusing ‘welcome rate’ promotion
Summary
Macquarie Bank is expected to pay a $14 million civil penalty in Australia after admitting it failed to provide financial services efficiently, honestly and fairly. The case concerns 2022 promotions for a “welcome rate” that some customers may have understood as an extra bonus on top of the standard savings rate, while the bank’s systems did not adequately address the risk of confusion.Key Facts
- Macquarie Bank will not contest the Australian Securities and Investments Commission’s court proceedings.
- The bank described its 2022 savings offer as a “welcome variable rate” or “bonus,” according to the regulator.
- As standard variable rates rose, they overtook the welcome rate, and customers received the standard rate without an added bonus, ASIC alleged.
- ASIC Commissioner Alan Kirkland said the bank’s wording and systems and controls did not adequately address the risk that customers would misunderstand the offer.
- A 2023 competition regulator study found that 71% of bonus-interest accounts did not receive the bonus rate in a given month because customers failed to meet conditions.
- Savings account conditions can include making a monthly deposit, growing the balance or avoiding withdrawals.
- RMIT finance professor Angel Zhong said clear disclosure is especially important when interest rates change.
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