Macquarie Bank: $14 Million Penalty Proposed Over Savings Rate
Macquarie Bank faces a proposed $14 million penalty after admitting its Welcome Rate promotions could mislead savings customers. Australia’s corporate regulator also urged bank customers to check their account conditions and confirm they are receiving the interest rate they were promised.
Macquarie Bank faces a proposed $14 million penalty in Australia over savings promotions that led customers to expect a higher interest rate than they received, the bank admitted in proceedings brought by the corporate regulator.
The case is before the New South Wales Supreme Court. The Australian Securities and Investments Commission (ASIC) said the bank’s descriptions of its Welcome Rate could confuse customers about how interest was calculated.
Welcome Rate replaced the standard rate
Macquarie described the offer as both a “welcome variable rate” and a “bonus rate.” ASIC alleges those terms could lead customers to think the promotional interest was added to the standard variable rate.
Instead, the Welcome Rate replaced the standard rate during a four-month promotional period. Macquarie admitted it failed to take necessary steps to make its statements about the offer clear and unlikely to cause confusion among new customers.
The bank also admitted its advertising framework did not identify the risk of misunderstanding. It said timely corrections were not made despite customer complaints.
ASIC urges customers to check account terms
ASIC Commissioner Alan Kirkland said the issue extended beyond wording. “Macquarie's systems and controls were not rigorous enough to identify the risk that customers would misunderstand how the Welcome Rate worked.”
Kirkland urged customers to check the conditions attached to their savings accounts and whether their bank is paying the promised rate. “Consumers should check what conditions apply, whether they are meeting them and whether their bank is paying the interest rate they have been promised,” he said.
He also advised customers who cannot work out their rate to ask their bank for an explanation, and to raise the issue if they have met the conditions for a higher rate but are not receiving it.
Australians hold nearly $1.8 trillion in household deposits, and bonus-interest accounts are a popular way to earn more. ASIC cautioned that introductory and promotional rates can come with conditions that customers may find difficult to understand, while banks remain responsible for providing clear and accurate information.
Canstar analysis cited in the report found 41 per cent of Australian savers miss out on bonus interest each month because of conditions that are difficult to meet. Canstar data insights director Sally Tindall said, “If you've got a bonus saver, now's the time to do a stocktake.”
Kirkland said customers should not have to monitor every transaction to ensure their bank has paid interest correctly. “With households facing cost of living pressures, every dollar counts,” he said.
