Resi targeted by ASIC for rate ads

by Mackenzie McCarty20 Jun 2012

Resi is the latest lender to cop a reprimand from ASIC over advertising for its home loans.

The credit regulator announced yesterday that Resi had agreed to change online home loan advertising following concerns it was not adequately disclosing home loan comparison rates.

ASIC said Resi's comparison rate wasn't prominent enough. In one part of its website Resi included a table of other home loan products with interest rates but not comparison rates.

ASIC also said although Resi did include a required statutory warning about the accuracy of comparison rates, there was no clear reference to that warning for online consumers.

In its announcement, ASIC stated that other credit providers and broker should carefully review advertising practices and promotional materials to ensure compliance with the National Credit Act.

"Consistent disclosure of comparison rates in marketing material is a key tool for consumers trying to shop around and find the best rate on their home loan," ASIC commissioner Peter Kell said.

"ASIC will act when advertisements don't comply with the law," Kell added.

ASIC said that Resi has been cooperative in responding to ASIC's concerns about its comparison rate advertising and promptly corrected its website when requested by the regulator.

The regulator's concern over lender comparison rates recently came to light in a letter to the FBAA obtained by Australian Broker, which raised concerns such as:

  • Lenders not  consistently advertising comparison rates along with annual percentage rates
  • Lenders ot advertising the rates prominently enough
  • Lenders failing to include an NCCP prescribed disclaimer about the accuracy of comparison rates
  • Lenders failing to properly calculate comparison rates

Related stories:

Regulator takes bank to task over credit card ads

Watchdog threatens banks on comparison rates



  • by Loz 20/06/2012 10:35:28 AM

    I love how they focus so much on bullcrap...comparision rates a largely irrelivant given most customer refinance with 5 years anyway, which renders the comp rate useless.

    Why dont they focus on collusion between banks, scores of banks all offering damn near the same thing....

  • by phil.gt3 20/06/2012 11:07:05 AM

    I am in total agreement with Loz! At an AFG function yesterday, the average loan size for mortgages was stated as being massively above $150k for all states. Thus I too fail to see the relevance of a comparison rate as it presently promoted. A more realistic figure would be for $300k over 5 years; this is much closer to the real world in my humble opinion.

  • by Dave the broker 20/06/2012 12:50:38 PM

    people dont care about comparison rates - they want to know how much they are going to pay right now i.e. the current interest rate - ASIC should sort this out asap - $150k over 25 years is a joke!