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Outsource Financial has called for aggregators to educate their members so brokers don’t break home loan advertising rules.
Chief executive Tanya Sale agreed with a recent warning from the MFAA, which said the authorities are concerned about brokers who mistakenly believe that tricky fine print can validate untrue advertisements.
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“ASIC is looking at this type of advertising very carefully. Not only advertising – also what mortgage brokers are saying within their own websites,” she told The Adviser.
Ms Sale said aggregators need to make sure their brokers understand what is and isn’t allowed with advertising and website content.
She said false advertising was bad for the industry’s image, although she added that the problem was improving and that the MFAA had gone too far in calling it “widespread”.
Ms Sale said some brokers were accidentally breaking the rules because they don’t fully understand what is required in relation to wording and disclosure under regulations.
She also said some brokers were deliberately breaking the rules out of greed.
“It’s a bit of them pushing the boundaries, thinking ASIC have too much on their plate to look at everything. Trust me – ASIC are very much looking at this,” she said.
The MFAA’s recent warning included advice to brokers to avoid claims of minimal deposits in their advertising, because borrowers will always need more.
“A more acceptable approach would be a higher percentage which factors in the unavoidable costs,” the association said.
“A compromise is to have a prominent qualification part of, or alongside, the prominent claim.”
