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Finance with No Monthly Charges And No Minimum Balance Required. Apply now! Australia’s banking regulator says it had no cognition of the Bank of Queensland’s controversial new savings account that offers tickets in a monthly lottery rather than a competitive interest rate, despite claims it had approved it. The account has been criticized for encouraging gaming because it requires clients to forego an average 3.5 per cent in annual interest for the chance to win $20,000 a month. In standing up for the account yesterday, Bank of Queensland (BoQ) chief executive David Liddy said the company had gone through two years of examination and been approved by the Australian Prudential Regulation Authority, as well as and state drawing commissions.

Advertizement: Narrative continues below However an APRA spokesperson said the regulator had only learned about the product the previous day. It had not approved the account, nor was it needed to. BoQ chief operating officer Ram Kangatharan was forced to defend his chief, who was on a flight when the revelation was made. Mr Kangatharan apologised and said Mr Liddy had been incorrect. Nevertheless, he said the account had been given the go ahead by the relevant state and territory lottery commissions, who regulated savings accounts with trade promotions. “We can basically go ahead with it,” Mr Kangatharan said.

Consumer and anti-gambling advocates flagged legal activeness within hours of the product being revealed at the bank’s full-year profit proclamation in Brisbane yesterday, as revealed only by brisbanetimes.com.au today. Independent Senator Nick Xenophon, who staunchly opposes gaming, also spoke out about the account today. Mr Xenophon said he would follow authorities to give reasons for why the product was approved and he intended to raise the issue in Senate Estimates next week. The Win Account, to be premiered on November 15, will be the first of its type in Australia and is based on parallel products in New Zealand.

It has few fees and offers an yearly interest rate of 1 per cent, compared to most other savings accounts that bid about 4.5 per cent. Customers will be lured to the Win Account on the chance they can win the $20,000 1st award in a monthly lottery, with an opening total prize pool of $30,000. When a minimum $250 is deposited, every dollar in the account will receive a ticket in the lottery. But a client who deposits $1000 into the account stands to go down about $35 per year in interest. Consumer groups GetUp! and Choice, that are already pursuing class action versus 12 banks for what it claims are illegal charges, have mooted common action against Bank of Queensland.

Choice spokesman Christopher Zinn said the account was “unreliable” and would motivate gambling, while GetUp! described it as an “dishonest” banking practise. The Salvation Army’s head of problem gambling services, Gerard Byrne, said the product was unlikely to affect present-day problem gamblers, who typically did not save money. Nevertheless, it would ultimately prompt fresh gamblers. Mr Liddy said yesterday the bank had made the account because it was not able to offer competitive interest rates compared to the large four. He rejected suggestions it would incite gaming. “It’s not gambling. You’re putting your money securely in a bank and being eventually rewarded … you’re not putting your capital at endangerment at all,” Mr Liddy said. “It’s a special account that will attract to some people and some it won’t. We’re not trying to dictate to people what they do, people will make that decision. “All our market study and the behaviour of the merchandise in other markets suggests many people will adore it, others won’t touch it.”