The first two term deposits earned a moderate amount of interest. When the third term deposit began, economic conditions changed and the bank stopped paying interest on US dollar term deposits. It wrote to Alex at the start and end of each subsequent term deposit saying either that she would not earn interest on her money or that she had not earned interest on her money.

Five years later, Alex noticed she was not getting any interest on her money. She complained and said it was misleading for the bank to use the words "term deposit" if it was not paying interest. She also asked why anyone would want to lock money in for a set term without interest when an on-call account would earn interest.

Our investigation

We did not agree that the bank’s conduct had been misleading. Its letters to Alex clearly stated it would not pay interest. Nor could we interfere with the interest rate a bank chose to pay its customers as long as it was properly disclosed – which it had been.

During our investigation, Alex decided to withdraw her money early. No penalty applied, but the bank did say that it would apply a 1.1 per cent foreign cash fee if she wanted the money as cash in US dollars. Alex was unhappy about this. We found that the bank had properly disclosed the fee, but the bank decided to waive it.

Outcome

We didn't uphold Alex's complaint.