Common Advertising Errors
ASIC requires that all advertisements be compliant under the legislation. Advertisements must not breach the National Consumer Credit Protection Act 2009 (NCCP) and/or National Credit Code (NCC) which is contained at Schedule 1 of the NCCP Act.
Here are some common advertising errors:
- If advertisements fail to cite the Australian Credit Licence number of the licensee, this is a breach of s52 of the NCCP Act. Although the advertisements may appear to be published by a Credit Representative, they may identify credit services offered by the licensee and should, therefore, cite the licensee's Australian Credit Licence number. The license number needs to be disclosed as 'Australian Credit Licence 389328' as described by ASIC.
- If an advertisement displays a percentage rate and fails to provide a comparison rate warning this is a breach of s163 of the NCCP Act.
- If the comparison rate in the advertisement is less prominent than the annual percentage rate (as it is a much smaller font) this is a breach of 164(2) of the NCCP Act.
- Apply caution when stating the words 'Free' and/or 'Independent'.
- Ensure you only advertise those lenders you have accreditation with.
- Avoid attaching links to external websites where you cannot control the statements.
- Only use testimonials or written recommendations that are true.
- Disclosure statements and warnings need to be as large and bold as the main part of the advert.
- Be wary when using terms such as; Terms and Conditions Apply ie list all Terms and Conditions.
- Ensure the images you use are relevant to the advert, ie using a mansion image if marketing to first home buyers.
- Regulatory Guide RG234 covers all facets of advertising, not just mortgage brokers. It provides guidelines to prevent deceptive conduct that may influence or mislead a consumer.
- Avoid disputes under your External Dispute Resolution provider.
- Avoid any claims under your Professional Indemnity Insurance should a dispute not be resolved.
- Avoid ASIC penalties and/or enforceable undertakings.
What should you do now for ongoing compliance?
- Connective Credit Representatives must refer all advertising to the Compliance Managers for approval before going to market
- Ensure licensing statements are clear and correct ie suggested wording would be: <Company/Business Name> (Credit Representative xxxxxx) is authorised under Australian Credit Licence 389328.
- Download and read RG234
- Seek independent legal advice if required
- Please send all advertising to email@example.com prior to going to market so our Compliance Managers can approve or provide you with further guidance.