ASIC cracks down on misleading accounts
The Australian Securities and Investments Commission (ASIC) has moved to stamp out misleading terminology that has led some pensioners to believe they are earning a higher interest on standard savings accounts.
Several institutions have been using the term ‘deeming account' to describe basic savings accounts, when the term should only apply to an account that accrues a set rate of interest in line with the government scheme, according to ASIC.
The way the accounts are marketed suggests an untrue correlation between the savings accounts and Government's social security income test deeming rules, ASIC said.
"Special care should be taken when using terms which will have a particular connotation to consumers, to ensure that the product characteristics are consistent with the representations inherent in the product name," ASIC deputy chairman Peter Kell said.
The regulator said the word ‘deeming' should not be used unless there is a direct correlation to the government scheme, while assertions that the accounts are ‘comparable to', ‘compatible with', ‘guided by' or ‘reflective of' the deeming initiative should be removed as well, unless the connection is verifiable.
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