ASIC smacks banks on term deposits
The Australian Securities and Investments Commission (ASIC) has taken the major banks to task for their advertising around term deposits, pointing to a lack of disclosure and “dual pricing”.
The regulator’s warning has come in the wake of a “health check” that looked at eight banks holding over 80 per cent of Australia’s total term deposits.
ASIC found that seven out of the eight banks promoted their term deposits by advertising only the highest term deposit rates while maintaining lower rates for all other deposit periods.
It said this lack of disclosure or ‘dual pricing’, along with the potential for term deposits to rollover by default if no action was taken by the investor, created a risk of retail investors inadvertently ending up with a much lower interest rate.
“For retail investors, the key message is that they need to be alert when their term deposit is maturing to ensure they are getting the best deal on their new term deposit,” the chairman of ASIC, Tony D’Aloisio, said.
AUTHOR
Mike Taylor
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