One of Australia’s major lenders has been fined by the corporate watchdog for misleading home loan advertisements.
National Australia Bank has paid $40,800 in penalties after ASIC issued four infringement notices for potentially misleading advertisements.
The penalties relate to potentially misleading advertising of a UBank home loan product.
Each infringement notice imposed a penalty of $10,200.
The misleading representations were made in an advertising campaign that promoted an offer of a $2,014 EFTPOS gift card for consumers who obtained a home loan with UBank.
The advertisements with headlines, including ‘The BEST $2014 EVER’ and ‘Own $2014’ appeared in newspapers, radio and online from late December 2013 to early March 2014 and in digital screens on escalators from late January 2014 to February 2014.
ASIC was concerned that some details of UBank’s offer were not disclosed in some of the advertisements and, in others, were not disclosed in a clear and prominent manner. These included:
• a minimum loan amount of $350,000
• a requirement to use an electronic settlement process (known as FASTRefi) for refinanced loans
• all documents to be provided within five days
• a cap on the number of consumers eligible to receive the offer
Deputy Chairman Peter Kell said ASIC's crackdown on misleading advertising has seen action taken against 10 entities this year.
“ASIC will continue to take action where we believe firms have not provided clear, consistent information in their advertising,” Mr Kell said.
ASIC’s concerns led to UBank providing a $2,014 gift card to all consumers who applied for a loan during the relevant period and subsequently settled their loan.
The payment of an infringement notice is not an admission of a contravention of the Australian Securities and Investment Commission Act 2001 consumer protection provisions. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.