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14-257MR NAB pays $10,200 penalty for misleading statements in PDS
National Australia Bank (NAB) has paid $10,200 in penalties after ASIC issued an infringement notice for making potentially misleading statements in a product disclosure statement (PDS) for the NAB Annuity Term Deposit.
From June 2013 to August 2014, NAB offered the NAB Annuity Term Deposit to retail investors, including people who had retired or were approaching retirement. The PDS dated 17 June 2013 contained statements about the investment return on the NAB Annuity Term Deposit.
ASIC was concerned the statements may have misled consumers by representing that the interest rate, known in the PDS as the 'Fixed Interest Rate', was calculated on the entire principal amount invested. In reality, the rate only applied to the balance of the principal which reduced throughout the term of the investment. Deputy Chairman Peter Kell said, 'ASIC will continue to take action where we believe entities are not accurately promoting the product they offer.'
ASIC's concerns led to NAB issuing a new PDS and promotional materials. The payment of an infringement notice is not an admission of a contravention of the ASIC Act consumer protection provisions. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.