Bank of Ireland has been reprimanded by the Central Bank for a misleading advertisement that appeared in branches and newspapers last year, which erroneously suggested in the small print that savers putting a lump sum into a certain account would move to another attractive rate after 12 months.
The bank was also forced on Friday to apologise for a radio ad around the same time about its deposits offering, which it conceded was “not clear and potentially confusing”.
It said that both campaigns failed to meet the standards of the Consumer Protection Code in relation to accuracy and clarity.
The ads were pushed by the bank between September 10th and November 24th, at a time when each of the three remaining Irish banks had raised rates on certain savings products to 3 per cent after the European Central Bank (ECB) hiked its deposit rate to 4 per cent.
More than 90 per cent of household deposits in the Republic remain in current or other on-demand accounts that earn little or nothing.
Bank of Ireland said the newspaper and branch ads for its so-called Advantage Fixed Term Deposit Account – which offered a 2 per cent rate for 12 months, before rolling to a 0.1 per cent rate – erroneously stated that customers would move after the introductory period to a Super Saver Account.
This regular savings account offers a rate of 3 per cent, rolling to 2 per cent after 12 months.
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The bank said that it is now writing to all customers who opened a lump sum savings account between September and March of this year to apologise for the error.
However, a spokesman said that all product customers coming off a 2 per cent rate would still revert to a 0.1 per cent rate, even if the ads might have led to a reasonable expectation that they would earn more.
“All of the other information available to customers in relation to the Advantage Fixed Term Deposit Account was correct,” he said.
“This includes the information on the Bank of Ireland Group website, and the letters/emails customers received about the product. In respect of these letters, each customer who opened an Advantage Fixed Term Deposit Account received a customer rate sheet and terms and conditions when they applied for the account and a Confirmation of Lodgement letter after the account was opened. This correspondence included the correct product details.”
The second issue related to a radio advertisement between September 11th and October 8th to encourage saving generally, but referred specially to its 3 per cent-rate Super Saver Account product.
“As Bank of Ireland offers a range of savings and deposit products, this advertising was not clear and was potentially confusing, because consumers were not told that the rates mentioned were linked to one specific product,” it said.
The spokesman said that the bank’s own officials found the issues with the ads and reported them to the Central Bank. This occurred as they trawled through their advertising and marketing material as regulators pressed the wider industry on whether it was doing enough to tackle general consumer inertia when it comes to moving from money from low- to higher-yielding savings products.
A spokeswoman for the Central Bank said the authority had “engaged” with Bank of Ireland on this matter. “Where issues that affect customers arise, the Central Bank expects that clear and timely communications are put in place by regulated entities,” she said.
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