The ACCC has raised concerns over the lack of transparency in the pricing of retail deposit products by banks. 

In a recent report, the corporate regulator called for new regulations to address this issue and make it easier for consumers to compare returns on different deposit products.

The ACCC’s Retail deposits inquiry final report found that many retail deposits, including those with introductory or bonus interest rates, had pricing structures that made it challenging for customers to understand and compare interest rates effectively. 

Notably, the report revealed that 71 per cent of 'bonus' interest accounts, with a total balance of $300 billion, did not receive the promised bonus interest each month.

ACCC Chairman Gina Cass-Gottlieb says the high headline interest rates could be misleading for customers, as they often come with complex conditions that are difficult to meet and track. 

To address these concerns, the ACCC has made several recommendations.

One of the key recommendations is for banks to directly notify customers when they change interest rates and alert them to any impending changes. 

For example, if a customer is about to lose bonus interest entitlements due to excessive withdrawals, banks should inform them. 

Additionally, banks should report the percentage of accounts receiving bonus rates each month.

The ACCC also called for more transparent marketing of base rates, as some banks were found to reset bonus offers to rates significantly lower than advertised. 

The report noted that several banks were unable to provide information on how many customers missed out on bonus interest, highlighting the need for greater transparency.

Furthermore, the ACCC urged banks to actively prompt customers to consider switching to accounts with higher interest rates. 

To enhance customer switching, the ACCC recommended exploring the concept of “bank account portability”, similar to mobile number portability, which would simplify the process of switching banks.

The Australian Banking Association responded to the ACCC's findings, acknowledging that consumer confusion could arise due to the variety of deposit products available. 

The lobby has committed to reviewing the ACCC's recommendations to improve the product offerings.

In addition to addressing bank practices, the ACCC criticised comparison websites for not clearly disclosing commissions from banks. 

The regulator called for greater transparency from these websites, including displaying information about payments received from banks and how product ratings are determined.