ASIC is increasing its monitoring of advertising of banking products.

ASIC has released details of its concerns with Westpac Banking Corporation's advertising for the Westpac Choice account and the steps Westpac is taking to address ASIC’s concerns.

The Westpac Choice account was advertised as being free of monthly account keeping fees for customers depositing at least $2,000 per month.

ASIC was concerned the advertisements created the impression the initiative to remove monthly service fees applied automatically to existing account holders, when that was not the case.

ASIC was also concerned the advertisements presented the removal of monthly fees as a ‘commitment to lowering the cost of banking’ and as a key feature of the Choice account. In fact, at the time the advertisements were published, Westpac had not committed to retain the initiative beyond the initial promotional period, except for new account holders who applied during the promotional period.

In response Westpac is taking a number of steps to ensure that its existing customers have not been misled, including writing to all of them.

From 1 June 2009 in relation to the Westpac Choice account:

• all customers (existing and new) will be able to avoid monthly fees by depositing $2,000 per month; and
• the method of avoiding monthly service fees by maintaining a minimum monthly balance of $3,000 will no longer be available.

Related posts:

• Advertising and direct marketing clearance checklist
• Marketing, compliance and truth in lending
• What is involved in legally "clearing" an ad?

I discussed the ACCC's opposition to Woolworths epump proposal previously here.

The Australian Competition and Consumer Commission has now announced it will not oppose a revised exclusive arrangement between Woolworths and HSBC.

Under the arrangement, the Woolworths Everyday Money Credit Card issued by HSBC, will be the only payment option at Woolworths' new contactless pay at pump facility (epump) only until 15 August 2010.

Consumers holding other contactless cards will be able to use epump after that date, if not sooner.

The ACCC considers that these benefits outweigh any effects on competition and consumer choice during the limited exclusivity period.

The UK Financial Services Authority (FSA) has published the Turner Review of global banking regulation. 

Lord Turner, chairman of the FSA, reviews the events that led to the financial crisis and recommends reforms.

Some of the reforms will require international agreement and may be implemented in Australia.

The Government has announced that the amount of termination payments that may be made to company directors and executives without member approval will be reduced.

Currently these payments are regulated by Section 200B of the Corporations Act (as well as other CA provisions).

The changes would mean that:

• the level of payments to retiring credit union and building society directors without getting member approval would reduce;
• the definition of "board or managerial office" would be amended to include "key management personnel" so that the amount paid to retiring executives in that category without getting member approval would reduce.

The changes would apply to retirement plans as well as to payments made on mergers.

The new threshold is $320,320 (up from $315,480 ). The next change will be on 8 April 2009.

Further information is available at Hardship Threshold.

The Australian Industrial Relations Commission (AIRC) is currently finalising its decision on award modernisation in the financial services industry. Its final date for making the award is 3 April.

The overall goal is to simplify and rationalise the award system.

Whilst the process is not intended to increase costs for employers it is possible that this may occur. For example, in financial services if the provisions which currently apply to the major banks are adopted as the standard this will increase costs for credit unions and building societies in areas such as casual and part-time employees, hours and allowances.

The financial services group submissions are listed here.