In July 2022, the bank wrote to customers with performer accounts telling them it was about to stop offering performer accounts, but they could “keep using [such accounts] as normal for now”. The next month, it stopped offering performer accounts. Over the next year, the interest rate for performer accounts did not change from its October 2021 level, whereas the rate for savings accounts continued to climb.    

In August 2023, a bank staff member alerted John to the low interest rate of his company’s performer account, and he immediately transferred the money in that account to the savings account.  A few months later, the bank wrote to performer account customers advising them about other account options that might suit them better.

John complained that the bank disadvantaged his company by failing to tell him he had money in an unsuitable account, particularly since he had opened a performer account at the bank’s suggestion. He also said the bank’s July 2022 letter was misleading, deceptive or likely to mislead or deceive, because it did not tell customers that the performer account was out of favour. John alleged this was a breach of the Financial Markets Conduct Act 2013.

Our investigation

We considered the July 2022 letter should have included a reminder to John review his company’s banking products. Its failure to do so breached its obligation to communicate clearly and effectively with John, although it was not misleading, deceptive or likely to mislead or deceive, as he alleged, because what it did say was factually correct. Had the letter included such a reminder, we considered it likely John would have promptly moved the money from the performer account to the savings account. 

Outcome

The bank paid the company $4,110, equivalent to the extra interest it would have earned if it had switched from a performer account to a savings account in August 2022 until February 2023.  We considered John should have reviewed whether the performer account remained suitable for the company’s requirements in February 2023 when the account balance exceeded $1 million.