Macquarie Bank: $14 million penalty for savings account promotions

Macquarie Bank expects to pay a $14 million civil penalty for how it promoted a savings account interest rate in 2022. The bank has admitted to breaching the Corporations Act and stated it will not contest the court proceedings currently underway in the New South Wales Supreme Court.

The Australian Securities and Investments Commission alleged that the bank’s promotional materials used the phrases 'welcome variable rate' and 'bonus.' The regulator argued these terms could lead customers to believe they were receiving extra interest on top of the standard variable rate, rather than a separate, fixed advertised rate.

As interest rates rose in 2022, the gap between the promotional rate and the standard rate narrowed. The commission claimed that once the standard rate exceeded the welcome rate, customers received only the standard rate without the additional bonus they believed they were earning. A bank spokesperson confirmed that Macquarie would admit in court that it failed to provide financial services efficiently, honestly, and fairly.

ASIC Commissioner Alan Kirkland noted that customers should not need to examine every transaction to verify their interest payments. He stated that banks require systems and processes that fulfill their commitments to customers. Kirkland added that the issue extended beyond ambiguous language, as Macquarie’s internal controls failed to adequately identify the risk of customer misunderstanding.

This case occurs as savings products increasingly attach strict requirements to advertised rates, replacing the unconditional accounts that were once standard. A 2023 study by the competition regulator found that 71% of bonus interest accounts did not receive the bonus rate each month because customers failed to meet difficult-to-understand conditions.

Kirkland cautioned on Wednesday that a bank’s highest advertised rate might apply only temporarily or depend on specific requirements, such as monthly deposits or avoiding withdrawals. He urged consumers to check the conditions and verify that their bank is paying the promised interest. Australia’s official interest rate stands at an 18-year high of 4.85% amid persistent elevated inflation.

RMIT finance professor Angel Zhong stated that promotional offers became more prominent when rates moved, making clear disclosure especially important. She said differences in wording could influence major financial decisions and called for rate descriptions to be treated as a core compliance risk with clear senior accountability.