Misleading statements cost Westpac and NAB
Westpac and NAB have paid penalties for misleading consumers, ASIC has revealed.
Westpac has paid $20,400 in penalties after ASIC issued two infringement notices for potentially misleading statements contained in a Product Disclosure Statement (PDS) and other promotional material.
The statements were made from July 2013 to May 2014 and related to the investment returns on the Westpac Annuity Deposit, a product offered to retail investors planning for retirement.
ASIC was concerned that Westpac potentially misled consumers by representing that the interest rate — known as the ‘earnings rate' — was calculated on the principal amount invested. In reality, the rate only applied to the balance of the principal which could reduce throughout the term of the investment.
While NAB, the Australian financial services licensee for UBank, has paid $40,800 in penalties after ASIC issued four infringement notices for potentially misleading advertisements.
The penalties relate to potentially misleading advertising of a UBank home loan product.
The misleading representations were made in an advertising campaign that promoted an offer of a $2014 EFTPOS gift card for consumers who obtained a home loan with UBank. The advertisements with headline statements, including ‘The BEST $2014 EVER' and ‘Own $2014' appeared in newspapers, radio and online from late December 2013 to early March 2014 and in digital screens on escalators from late January 2014 to February 2014.
ASIC was concerned that some details of UBank's offer were not disclosed in some of the advertisements and, in others, were not disclosed in a clear and prominent manner. These included:
- a minimum loan amount of $350,000
- a requirement to use an electronic settlement process (known as FASTRefi) for refinanced loans
- all documents to be provided within five days, and
- a cap on the number of consumers eligible to receive the offer.
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