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One of Australia’s largest broker franchise groups has been fined by ASIC for false advertising.
The regulator issued a $30,600 penalty following the airing of TV and online commercials last year that claimed Mortgage Choice had, on average, saved customers ‘$10,000 over five years’.
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ASIC, however, claims no customer had actually saved $10,000 over five years at the time of the advertisement being run.
ASIC found the savings of $10,000 over five years were projected savings based on calculations from a sample number of around 300 refinancing customers over a six-month period.
However, CEO of Mortgage Choice Michael Russell told The Adviser that he is keen to move on.
“Mortgage Choice has fully co-operated with ASIC during their investigation and while we are disappointed with the end result, the matter has now been dealt with and we consider it to be finalised,” Mr Russell said.
“We take our responsibility to advertise in accordance with the appropriate regulations and laws very seriously and will heed ASIC’s guidance going forward.”
ASIC issued three separate infringement notices to Mortgage Choice, one for representations made in the television advertisements, and two for representations made on the websites.
This is not the first time Mortgage Choice has crossed swords with ASIC over claims made in advertising.
In 2003, the regulator claimed that use of the words ‘independent’ and ‘unbiased’ in Mortgage Choice’s TV, print and online advertising were false and misleading, ruling that the Mortgage Choice panel did not include every lender and so could not possibly provide an ‘unbiased’ recommendation.
Deputy chairman of ASIC Peter Kell said the regulator will not hesitate to stamp down on inaccuracies in advertising.
“Advertising plays a crucial role in the decisions consumers make, and any claims made about savings a consumer might make need to be accurate and supported by evidence,” he said.
“ASIC will continue to act in instances where advertisements contain representations about a product that are false or misleading.”
