Macquarie Bank has admitted failures in how it promoted a savings-account Welcome Rate, with ASIC and the bank jointly proposing an A$14 million penalty to the NSW Supreme Court.
The proposed resolution remains subject to court approval. Separately, A$8.8 million in remediation has already been paid to nearly 40,000 customers, according to ASIC.
What was the issue?
ASIC says descriptions of the historical offer could lead customers to expect a bonus on top of the standard savings rate.
The promotion generally operated differently: the introductory rate applied instead of the standard rate during the four-month promotional period.
The advertising at issue ran between December 1, 2021, and September 9, 2022.
Why did rising interest rates matter?
Macquarie explains that when the standard variable rate rose above the Welcome Rate, customers received the higher standard rate. Some had expected a bonus margin above that rate.
The bank acknowledged that its website wording was insufficiently clear and could cause confusion.
Has the court imposed the penalty?
ASIC’s announcement describes a jointly proposed penalty requiring court approval. It should therefore be reported as proposed unless a subsequent court decision confirms otherwise.
The penalty and customer remediation are separate amounts. The proposed A$14 million penalty should not be described as a new compensation pool available to customers.
What has Macquarie said?
In its November 11 statement, Macquarie said it would not contest the proceeding and apologised for the confusion.
The bank said its compensation aimed to put customers in the position they would have occupied if the Welcome Rate had been a fixed bonus margin. It also reported reviewing product descriptions and strengthening the processes used to approve customer communications.
What should customers check?
Customers with questions about the historical offer can ask the bank to explain the rate applied to their account and whether remediation has already been considered.
Useful questions include:
- What were the offer’s terms when I opened the account?
- Was the advertised rate a total rate or an additional bonus?
- When did the introductory period end?
- What rate applied afterwards?
These questions are also useful when comparing savings promotions. A prominent headline rate needs to be read alongside the conditions that determine how it works.