Macquarie: Savers Urged to Check Interest Rates After $14m Penalty
Macquarie Bank has admitted that wording for a promotional savings rate may have confused customers about how interest was calculated. The bank has agreed to a proposed $14 million civil penalty and says it has paid $8.8 million in compensation to nearly 40,000 customers.
Macquarie Bank has admitted to failures in promoting a savings rate and agreed to a proposed $14 million civil penalty, prompting a warning that savers should check whether their accounts pay the interest promised.
The case concerns the bank’s “Welcome Rate” promotion for new savings customers. Macquarie said the products appeared on its website between December 2021 and September 2022.
How the promotional rate worked
The bank described the rate as a “welcome variable rate” and a “bonus.” Australia’s corporate regulator, the Australian Securities and Investments Commission, said that wording could lead customers to believe the rate was paid on top of the standard variable rate.
Instead, the Welcome Rate generally applied as a fixed rate in place of the standard rate during the four-month promotional period, the regulator said. When the standard variable rate rose above the Welcome Rate, Macquarie paid customers the higher standard rate, though some customers expected an additional bonus margin.
Macquarie said it would not contest the regulator’s court proceeding and would admit it failed to provide financial services efficiently, honestly and fairly. The proposed penalty is before the NSW Supreme Court for approval.
Compensation and consumer warning
The proposed penalty comes on top of $8.8 million in compensation that Macquarie says it has paid to nearly 40,000 customers. The bank said it chose to compensate customers based on the understanding that the Welcome Rate was a fixed bonus margin.
“Macquarie acknowledges that some of the wording on its website was not sufficiently clear and may have caused confusion,” the bank said.
ASIC commissioner Alan Kirkland said Australians held almost $1.8 trillion in household deposits and urged customers to check the conditions attached to advertised rates.
“Higher advertised rates may only apply for a limited time or may depend on the customer meeting certain conditions,” Kirkland said. “Consumers should check what conditions apply, whether they are meeting them and whether their bank is paying the interest rate they have been promised.”
Kirkland said the problem extended beyond the 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.
Macquarie’s head of banking and financial services, Ben Perham, said the bank had received complaints and reviewed product descriptions across its website. “We should have better explained on our website how the Welcome Rate would be applied and we apologise for any confusion caused,” he said.
