Credit Union Australia will keep its promise to beat big four banks’ mortgage rates by 1%, to avoid an ASIC court case over misleading advertising.
CUA said in advertisements that interest for its Rate Breaker Package would be 1% less than the average standard variable interest rate of NAB, Westpac, CBA and ANZ.
But the deal was subject to terms and conditions that allowed CUA to change the discount at any time, and stipulated that the interest rate could not fall below 3%.
ASIC argued that the advertisements did not draw enough attention to terms and conditions, so the advertising was misleading.
In response, CUA has agreed to put aside those limits for customers who sign up to the Rate Breaker Package before 31 August, except if the interest rate falls below 0%.
CUA will also “sufficiently highlight” the 3% minimum and its ability to change the discount rate in all future advertising.
CUA had issued 2083 Rate Breaker Package loans as of 23 July.
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