The Australian Securities and Investments Commission (ob体育) today issued a warning to the mortgage broking industry regarding misleading advertising.
鈥楧on鈥檛 claim that you are independent or impartial if that鈥檚 not true鈥�, Mr Greg Tanzer, ob体育鈥檚 Executive Director of Consumer Protection and International said.
鈥業n every case that we have examined to date, we found such claims were misleading. For example, you cannot be totally impartial if you only deal with a limited panel of lenders who are paying you commission鈥�, Mr Tanzer said.
鈥楾he message to consumers is to shop around for home loans. See what kind of loans are available and get an idea of current rates. That way, if you use a mortgage broker, you can check if you are getting the best deal鈥�, Mr Tanzer said.
Mr Tanzer issued the warning after ob体育 accepted an enforceable undertaking from Structured Financial Solutions Pty Ltd in relation to claims which ob体育 found to be misleading and deceptive.
Between 1 June 2003 and 10 February 2004, Structured Financial Solutions published various advertisements and brochures in which it claimed to offer 鈥榠ndependent鈥� and 鈥榠mpartial鈥� advice about mortgages.
ob体育 considered the claims misleading and deceptive because Structured Financial Solutions advises consumers only about the lenders appointed to its panel. All of the lenders on the panel pay commission to Structured Financial Solutions.
As a result of ob体育鈥檚 concerns, Structured Financial Solutions has given an undertaking that:
- Structured Financial Solutions will not make any of the above claims or use the words 鈥榠mpartial鈥� or 鈥榠ndependent鈥� in any future advertising or promotional material;
- Structured Financial Solutions will provide compensation to any customer who has suffered loss as a result of relying on the claims Structured Financial Solutions is 鈥榠mpartial鈥� or 鈥榠ndependent鈥�;
- Structured Financial Solutions will implement a compliance program and complaints handling system; and
- Structured Financial Solutions will make a financial contribution towards consumer education or similar programs.
鈥楾his case highlights the need for all mortgage brokers to make sure that what they claim in advertising and promotional material is completely accurate and correct. ob体育 will insist that anybody claiming to offer 鈥榠ndependent鈥� or 鈥榠mpartial鈥� advice must be able to show the claim to be strictly correct鈥�, Mr Tanzer said.
鈥榦b体育 will continue to work with the industry including the Mortgage Industry Association of Australia, to improve standards in this area鈥�, Mr. Tanzer added.
ob体育鈥檚 consumer website FIDO at www.fido.asic.gov.au offers tips on how to make the best use of mortgage brokers.
End of release