Westpac fined for misleading consumers
Westpac has copped a $20,400 fine from ASIC for making 'misleading statements' about the returns on its annuity deposits.
ASIC has issued two infringement notices to Westpac for "potentially misleading statements" contained in the Westpac Annuity Deposit 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 said in a statement released yesterday.
"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," said the statement.
"In reality, the rate only applied to the balance of the principal which could reduce throughout the term of the investment," ASIC said.
The representations appeared in the PDS dated 1 July 2013; booklets entitled ‘Westpac Annuity Deposit Investor Guide/FAQ’ and ‘Build a brighter future with Westpac Retirement Deposits’, both dated 1 July 2013; and a webpage entitled ‘Westpac Annuity Deposits’.
Deputy chairman Peter Kell said, "ASIC will act to ensure firms provide clear and accurate information to consumers about their financial products."
Westpac has issued a new PDS and promotional materials following ASIC's concerns, said the statement.
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