ING Direct will pay $5.4 million in compensation to thousands of its superannuation customers who ASIC says were potentially misled about costs and fees.
The regulator said between March 2015 and September 2016 the online bank's Living Super superannuation product was promoted as having no-fee or low-fee options, without clearly stating that customers would receive a lower return on cash investments than customers of another ING product, Savings Maximser.
Some promotions also failed to indicate that the fees could change if ING Direct was no longer the investment manager.
ASIC Commissioner Greg Tanzer said marketing superannuation products based on low fee or no-fee arrangements can be very influential on consumers.
"This makes it very important to ensure any such promotion is not potentially misleading by reducing the benefits consumers receive in exchange for the no fees or low fees features," he said.
ASIC also said it was disappointed ING Direct offered inducements such as cash payments to superannuation clients - an offer that might encourage people to make short-term decisions.
The inducement is understood to have been $100 towards the cost of financial advice for new superannuation clients.
ING Direct acknowledged its communication could have been clearer and said it will compensate about 24,500 customers for the total $5.4 million extra they would have been paid if they had received the highest variable savings rate.
The bank also said it will no longer promote Living Super based on no-fees or no-investment-and-administration-fees features, and will stop offering separate product inducements.
