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Major franchise hit with false advertising charge

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Australian Broker | 28 Nov 2013, 10:39 AM Agree 0
A major franchise group has been forced by ASIC to pay more than $30,000 in penalties for false advertising.
  • luke | 28 Nov 2013, 10:52 AM Agree 0
    Very interesting.
    Misleading.. Should have been higher.
  • Ben | 28 Nov 2013, 10:58 AM Agree 0
    You're kidding? $30,000?
    I'm sure the business they wrote, and the profit they earned would have eclipsed this petty fee. They'll be laughing.
  • Ross | 28 Nov 2013, 10:58 AM Agree 0
    Soft Fine
  • Peter | 28 Nov 2013, 11:03 AM Agree 0
    They should be fined for at last the cost of the media campaign - more like a $1M get some teeth ASIC
  • Country Broker | 28 Nov 2013, 11:10 AM Agree 0
    This is not even a slap on the wrist , its a hit with a feather duster ! What about potential clients who went there instead of the local independent broker because of this advertising and were written by a franchisee? A better penalty would have been a refund of all application fees for refinance applications approved and settled up to six months after the advertising stopped by the parent company. THIS IS A JOKE . Will the MFAA be looking at disciplinary action against the parent company ? Somehow I doubt it. If this was an independent broker without the high powered lawyers, they would be in real trouble .
  • John C | 28 Nov 2013, 11:12 AM Agree 0
    Misleading!! I disagree. If the broker has been able to restructure an existing deal that will save them (the client/customer) up to $10,000 over a five year period against their current facility, then how is this misleading and deceptive? If at the time of the review of the client/customer's position by restructuring their facilities will save then this money then it has. This is over regulation and nanny statism at it's worst continuing on from the former Government. As soon as this type of heavy handed controlling regulation is wound back the better we are all going to be. You can't tell me that every other broker out there is not trying to save their new prospective clients money by restructuring or getting a cheaper rate elsewhere!! C'mon boys and girls WAKE UP for Christ's sake!!
  • Papery | 28 Nov 2013, 11:33 AM Agree 0
    It wont be until 2017 (at the earliest) that anyone who refinanced as a result of the MC advert is able to put their hand on their heart & say 'yes I saved $10k on my HLN because I refinanced with MC'.

    Agree totally with the ruling, but the penalty was pretty lame.

    The real issue perhaps lies where the refinance resulted in a demonstrated improvement in the borrowers overall current position & the new product was not unsuitable....but how do you get an advertising bang out of that?
  • dpathle | 28 Nov 2013, 11:33 AM Agree 0
    This will not stop the finance industry moving clients from one perfectly good lender to the other for the sake of a commission. We tend to help ourselves before we help the customer. This advertising was an attention grabber for new clients and if they were silly enough to fall for it, then don't blame the client, blame ASIC for not having better adds to warn people of these types of lending tricks. ASIC keeps putting out fires instead of taking away the fuel.
  • Broker | 28 Nov 2013, 11:34 AM Agree 0
    Lucky it wasn't a sole self-employed broker, ASIC probably would've banned them for life!!
  • Old joe | 28 Nov 2013, 11:37 AM Agree 0
    Where is the MFAA in this....was this in their charter to stop this....
  • Papery | 28 Nov 2013, 11:42 AM Agree 0
    I wish I could move several of my clients to better Lenders compared we where we started a few years ago. Valuers & LMI are the roadblocks, not to mention the current Lender Credit mentality for 'reasons to decline' as opposed to 'reasons to approve'.
  • David G | 28 Nov 2013, 11:57 AM Agree 0
    I agree with John C. ASIC have been over the top and I fail to see how this is misleading. Perhaps you could argue that they "will " save $10000 over 5 years rather than "have" saved $10,000 over 5 years but again John C is really spot on. I often use the expression that I have saved you so much over such a term. This is simply not fair to MC. I am not a member of MC by the way just defending the advertising which I think is actually fair.
  • John C | 28 Nov 2013, 12:02 PM Agree 0
    Papery, easy!! Be innovative and think outside the square to assist your existing and new prospective clients. If your new clients are delighted with your service and the deal you have got them, ask them for an endorsement to promote your business. This will show other people that these clients are delighted with you & are prepared to give you a good rap for a job well done. Just make sure you have these endorsements in writing on file so you can't be accused of false amd mis-leading statements.

    If you don't your business will die!!
  • John C | 28 Nov 2013, 12:10 PM Agree 0
    David G, Thank you for your support. For the record I am not associated with MC either.

    We are in the process of starting a Political Party specialising in the support of small business (and than means all of you brokers by the way) and one of the platforms will be to get rid of this heavy handed regulatory crap being dished out to the small business person who does not have the resources to fight this type mentallity on their own.
  • Coast Broker | 28 Nov 2013, 12:15 PM Agree 0
    Very poor from ASIC on a large player that should no better. With their commission structure were by the broker does not make much per application they could afford a larger fine and should be made an example of.
  • mac | 28 Nov 2013, 12:59 PM Agree 0
    So if you can get a client a 0.5% pa lower rate than they are on with their current bank and they have a $400,000 I.O. loan how are you are no saving them $10,000 over 5 years? I really don't get it. Seems harsh to me.
  • dpathle | 28 Nov 2013, 01:11 PM Agree 0
    You will find that they will get the .5% lower rate with their own bank, or at least .2% and then that sales pitch does not hold weight either. What about all of the broker 2 years ago saying that you should lock in now as rates surely will not go lower. Are broker there to sell to the client or help the client. If MC is really seen to be helping their clients, then that sells itself ..... but there is not a lot of money in helping people.
  • mac | 28 Nov 2013, 01:25 PM Agree 0
    It is not my responsibility to negotiate with a potential customers current service provider. I offer what I can and they decide if they want to take it. No lost sleep here. That said I rarely do $ for $ refinances because of what you said and the hassle factor for the client is a massive impediment.
  • Dave Robinson | 28 Nov 2013, 02:28 PM Agree 0
    This would seem a soft penalty when compared with the recent broker who got banned for 6 months. His was a clause that was never used and removed and a delay in renewing his licence, not a national misleading campaign.

    I too look forward to the MFAA's Tribunal findings in the next couple of months. If nothing comes forward and the MFAA still insist's that it is ridding the industry of cowboys then ASIC might fine them for misleading statements. Ah the web they weave.

    If only we could get some consistency in the actions that we see.
  • WA Broker | 28 Nov 2013, 02:57 PM Agree 0
    Errors occur and ASIC needs to impose infringements to encourage
    Compliance. Will MC required to advertise and apology in national papers?
    Broker who recently got banned for 6mth having Caveat in his mandate had
    His ACL cancelled for 6mths, I’m sure he would of been happy to pay the same fine.
    ASIC needs to be consistent with their actions and don't have one rule for large corporations and another for small operators .

  • Gav of Brisbane | 28 Nov 2013, 02:58 PM Agree 0
    Then of course there's the brokers who advertise "reduce the monthly repayments on your home loan by ......" and then come out, refinance the loan and reset the term back to 30 years.
  • Tony South Coast | 28 Nov 2013, 03:26 PM Agree 0
    Oh, come on guys. I think this is an over-reaction by ASIC (and by many of you). Yes, MC should have stated that this was the anticipated saving over the next 5 years had the client not refinanced or approached their existing lender for a better deal (with a "subject to" all other things being equal), because in that situation it is true. I would be mortified if ASIC fined us for saying this to our clients.

    I am sure that most, if not every broker would have sold the benefits of a refinance to their clients in this exact way on at least some occasions. I have also gone back to the clients' existing lender on many occasions to seek a better rate (without refinancing) if this was the best outcome for the client -- and I'm sure that most "professional" brokers would have done the same thing as well.

    I think MC simply needed to "tweak" their advertising to correctly reflect the anticipated savings with the stated "riders".
  • QEDRisk | 28 Nov 2013, 03:26 PM Agree 0
    No disrespect to JohnC but I have to agree with the rest of you. MC said "we have done this" when, in fact, they had never actually done it. Projections are just crystal ball-gazing. This was misleading and deceptive, straight up and down. When I was the Compliance Manager at #BigBank there is no way I would have let this out the door.

    But then...the absolutely paltry penalty is a total disgrace when compared to the income-shattering 6 month ban handed to the SA broker last month.

    Big corporate Australia gets away with it again and the toothless regulators continue to cane the little guys.
  • John C | 29 Nov 2013, 01:05 AM Agree 0
    I can't believe all the negativity I have read in this post! Just incredible and extremely sad. MC should be applauded for promoting the use of Brokerage Houses/Brokers instead of all this convict mentality and moaning I am seeing here from people who have not thought about doing the same. If things are so bad, then what are you still doing remaining in this business. Get OUT Now before you destroy it for the others who are trying to make a career from it. Give your respective Member Associations a good swift kick up the back-side and make them earn your membership fee.... !! Stop moaning and carrying on like pork chops and review your position and marketing strategy and piggy back of the marketing of these larger firms to benefit your business....That's right get off your back side and do something about it!!
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