National Australia Bank (NAB) has paid $10,200 in fines after the corporate regulator found the bank made misleading statements in its annuity term deposit product disclosure statement (PDS).
The PDS related to an annuity term deposit NAB offered from June 2013 to August 2014 to retail investors, including those who had or were heading towards retirement.
The Australian Securities and Investments Commission (ASIC) were worried the statements could have misinformed consumers by saying the fixed interest rate is calculated on the principal amount invested at the start of the investment.
ASIC issued a clarification saying it is not calculated on the investment but applies only to the balance of the principal, which gradually reduced throughout the investment period.
NAB also said the fixed interest rate on the annuity term deposit is referrable to the average annual fixed interest rate earned on the investment but ASIC clarified that this is not the case.
NAB issued a new PDS and promotional materials following ASIC's actions.
"ASIC will continue to take action where we believe entities are not accurately promoting the product they offer," deputy chairman Peter Kell said.
