ASIC has signaled it will be handing down harsher penalties for misleading advertising, following revelations yesterday Mortgage Choice has been fined $30,000 for infringements
The franchise was hit with three infringement notices from ASIC, each worth $10,200, relating to an advertising campaign that ran last year.
The advertisements made claims about savings Mortgage Choice had made for consumers through refinancing. The claims, however, were projected savings and ASIC ruled that since no customer had yet saved the amount claimed, the advertisements were misleading.
Many Australian Broker readers commented
that the fine, for a company the size of Mortgage Choice, was not a enough of a deterrent.
Reader Duncan Perkins of Home Loan Essentials says the fine is almost insignificant in context of a business the size of Mortgage Choice.
“A stupid fine of $30,000 to Mortgage Choice would’ve been a poofteenth of the money it cost ASIC to take them to court… ASIC really need to be pushing their weight around and making these big guys toe the line.”
ASIC, however, responded that $10,200 is the maximum penalty for this kind of offence, and the amount is standard for all businesses.
But the regulator stressed it takes these kinds of offenses seriously.
“ASIC has shown that we will take action when confronted with misleading or deceptive advertising- as we have done in this matter.
“When we see false claims, we will seek outcomes that involve potentially stronger penalties than we have sought in the past.”
Further education of the public surrounding types of misleading advertising, through advertisements and the like, would be a better option than administering fines, says Perkins.
“How difficult would it be to put up out an advertisement that says ‘If you see an advertisement like this or you feel you’ve been taken down the river, let us know’?”
ASIC responded that all infringement notices are issued in the public domain.
“It is important to act quickly and effectively to ensure consumers are not harmed. The timeliness of our action ensured no consumers suffered financial loss,” said the regulator.
“Advertising can help people make financial decisions. Because of this, it's important that information is accurate. We want to help consumers make informed and confident financial decisions.”
Mortgage Choice CEO Michael Russell responded that the franchise had cooperated fully with ASIC during the investigation “and while we are disappointed with the end result, the matter has now been dealt with and we consider it to be finalised”.
“We take our responsibility to advertise in accordance with the appropriate regulations and laws very seriously and will heed ASIC’s guidance going forward,” said Russell.
ASIC suggests all financial service providers take clear note of Regulatory Guide 234: Advertising financial products and services (including credit)
to ensure their actions do not breach ASIC regulations.