Macquarie Bank admits error in 2022 savings rate promotion

Macquarie Bank has agreed to pay a $14 million civil penalty for how it marketed a savings account in 2022. The bank admitted to breaching the Corporations Act and stated it would not contest the proceedings in the New South Wales Supreme Court. The decision resolves a complaint filed by the Australian Securities and Investments Commission regarding the bank's promotional materials.

The regulator alleged that Macquarie used the terms 'welcome variable rate' and 'bonus' in its advertising. Asic contended that this language could lead customers to believe they would receive interest payments on top of the bank's standard variable rate. In reality, the promotional rate was a separate tier, not an additive bonus. This distinction became less clear during 2022 as general interest rates rose.

Asic alleged that when the standard rate moved above the promotional rate, customers received only the standard rate. Macquarie's spokesperson confirmed the bank would admit in court that it failed to provide financial services efficiently, honestly, and fairly. The bank's internal controls did not adequately identify the risk that customers would misunderstand the promotion structure.

Alan Kirkland, an Asic commissioner, said customers should not have to audit every transaction to verify their interest payments. He emphasized that banks need systems and processes that align with their commitments to clients. Kirkland noted that the issue extended beyond ambiguous wording to the bank's failure to manage the risk of customer misunderstanding.

The penalty is part of a wider regulatory focus on savings products that attach strict conditions to advertised rates. A 2023 study by the competition regulator found that 71% of bonus interest account holders missed out on the higher rate each month. The study indicated that customers often failed to meet conditions that were difficult to understand.

Kirkland warned that high advertised rates often apply only temporarily or depend on specific actions, such as regular deposits or avoiding withdrawals. He urged consumers to verify whether they are meeting these conditions and receiving the promised interest. RMIT finance professor Angel Zhong said clear disclosure is vital when rates fluctuate, as differences in wording can influence major financial decisions.

Australia's official cash rate stands at 4.85%, an 18-year high. Many savers rely on interest income to manage living costs or build home deposits. Zhong called for rate descriptions to be treated as a core compliance risk with clear senior accountability.