Mortgage broker Mortgage Choice Limited, has recently received 3 infringement notices from ASIC for false advertising and has paid $30,600 in penalties.
Mortgage Choice online and television advertising stated that Mortgage Choice had refinanced numerous home loans and on average saved customers '$10,000 over 5 years'. ASIC found that these savings were in fact projections on the savings of 300 customers over a 6 month period, and that no customer had actually achieved the savings of $10,000 over 5 years.
ASIC's decision was that these projections were misleading for the consumer. This decision serves as a timely reminder of the care required when making claims about savings (or financial performance generally) based on hypothetical calculations. ASIC has stressed that claims about savings that a consumer might make need to be accurate and supported by evidence. ASIC RG 53 (The use of Past Performance in Promotional Material) sets out a number of considerations that must be addressed to ensure past performance figures are not misleading.
The lesson: be careful how you represent savings (or other types of performance) to consumers in advertising. ASIC undertakes ongoing surveillance of online advertising among other forms of market surveillance.
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