A home building company has paid $50,400 in penalties after the regulator issued four infringement notices for misleading advertising aimed at first home buyers.
The Australian Securities and Investments Commission (ASIC) found that Metricon Homes Pty Ltd's (Metricon) '2K on your way' campaign for its 'HomeSolution' house and land packages (HomeSolution) contained misleading representations about eligibility to qualify.
The HomeSolution advertisements created the impression that consumers who qualified for the first home owner grant could obtain a Metricon HomeSolution house and land package with a $2,000 deposit.
However, consumers were still required to fund the balance of the prescribed 5% deposit (approximately $30,000 on a typical $600,000 package, but could be as much as $41,000 on a $825,000 package). This additional amount was financed through an unsecured personal loan, typically through one of Metricon’s associated finance brokers.
ASIC found that any disclaimer in the HomeSolution advertisements was not prominent enough to effectively qualify the dominant message of the advertising.
Consumers were also required to navigate through links on Metricon’s website to the HomeSolution landing page where eligibility conditions were listed in small font at the bottom of that page.
In response to ASIC’s investigation, Metricon has withdrawn the concerning advertising and ceased promoting its '2K on your way' offer.
ASIC has reminded all financial services firms to regularly review their advertising compliance arrangements. The regulator proactively monitors all forms of advertising, including advertising on-line, and will take action in appropriate circumstances.