National Australia Bank and Westpac have been fined for making misleading statements to customers, becoming the first big banks to be caught in the corporate watchdog's campaign on corporate advertising this year.
The Australian Securities and Investments Commission on Wednesday said NAB had been fined $40,800 over advertisements for home loans from its online lender, UBank.
Westpac has also paid $20,400 in fines due to claims it made about returns available for an annuity deposit - a product used by retirees looking for a secure line of income.
The watchdog took issue with NAB's promotion of a $2014 gift card for customers who took out a home loan with UBank.
ASIC said it was concerned that some of the ads, which ran widely in newspapers, on radio and online, did not prominently disclose certain terms and conditions.
For instance, there was a minimum loan size of $350,000, a cap on the number of people who could receive the gift card, and all documents had to be provided to the bank within five days.
ASIC said Westpac's product disclosure statement for annuity products potentially misled consumers in how it calculated the interest rate payable to consumers, known as the "earnings rate."
ASIC said Westpac represented that the earnings rate was calculated on the principal invested. ASIC said this was misleading because in reality, the rate actually applied to the balance of the principal, which could fall over time. A Westpac spokeswoman said that since its launch, no investor has selected the variant of the product about which ASIC had concerns.
ASIC has fined 11 financial services companies for making misleading statements this year, it said. NAB and Westpac are the first of the big four banks to be caught in the crackdown.
"ASIC will act to ensure firms provide clear and accurate information to consumers about their financial products," ASIC deputy chairman Peter Kell said.Author: Clancy Yeates
Source: Sydney Morning Herald