Our Investigation

The bank’s records showed that, at the end of each investment term, Conrad and Nikita would contact the bank to ask about current interest rates and term options. The bank provided the information, and Conrad and Nikita made their choice. We found the bank followed Conrad and Nikita’s instructions and did not give any financial advice. It had no obligation to recommend compounding interest. We reviewed the information on the bank’s website and concluded it could be clearer, but it was not misleading. However, we also examined the record of a banking review in 2020 during which Conrad and Nikita discussed their investment goals with the bank, and we considered it would have been reasonable at this point for the bank to suggest compounding interest.

We recommended the bank pay the difference between simple and compound interest on Conrad and Nikita’s investments from the 2020 banking review onwards – a difference of $1,600. We also recommended the bank amend its website to make the benefits of compounding interest clearer to customers.

Outcome

The bank agreed to amend its website as suggested and offered Conrad and Nikita $1,600. They accepted the bank’s offer.