The major brokerage has rejected the consumer group’s claim that Aussie is a “sales outpost” for the Commonwealth Bank, among other accusations submitted to ASIC.
Consumer group CHOICE has filed a complaint with the Australian Securities and Investments Commission (ASIC) regarding what it has perceived as “potentially misleading” advertising from Aussie Home Loans.
CHOICE has disputed claims allegedly made by Aussie in its marketing campaigns, which suggest that its brokers would shop around to find customers the “best deal”, the “best mortgage rate”, or the “perfect loan”.
In its complaint to ASIC, CHOICE claimed that such language “misrepresents how Aussie Home Loans mortgage brokers and the industry as a whole actually operates”.
CHOICE CEO Alan Kirkland accused Aussie of being a “well-designed sales outpost” for its parent company, the Commonwealth Bank of Australia (CBA).
“Aussie Home Loans makes claims of finding Australians the ‘perfect loan’ or the ‘best loan’, yet ASIC research found it sent two in five loans straight back to the Commonwealth Bank,” he said.
CHOICE alleged that Aussie’s advertising claims are “potentially misleading and deceptive” because they claim:
- brokers will find people a high-quality loan;
- brokers will scan the market to find the best product; and
- mortgage brokers are “free”.
“CHOICE is concerned that people who have seen these ads are likely to have formed the incorrect impression that mortgage brokers will scan the market to find them a high-quality loan, when the industry has failed to achieve this,” Mr Kirkland added.
The consumer group also stated that its investigation found that Aussie’s claims are “not an isolated case” and are “indicative of what has long been happening across the mortgage broking industry”.
However, Aussie Home Loans has dismissed CHOICE’s allegations, stating that it is “aware of its obligations” and is “disappointed” that CHOICE has targeted the brokerage and the broader sector in a campaign to “defame an industry that exists to ensure consumers have options and choice”.
“CHOICE never approached Aussie with its concerns, and if it had done so, Aussie would have been able to show that their assertions are inaccurate and misleading to consumers,” the brokerage stated.
Aussie noted that approximately two-thirds of loans referred by Aussie are through non-major banks, adding that its own white label loans are funded by a number of lenders.
“The percentage of loans that have been referred to CBA has averaged between 10 per cent and 13 per cent in the last three financial years,” the broking group stated.
“CBA is just one of three funders for Aussie’s own branded products and averages around the same 13 per cent of the total loans referred by Aussie. The remainder of Aussie-branded loans have been funded by three other non-major bank lenders.”
Aussie concluded: “We are always focused on great outcomes for our customers and continue to invest in marketing, customer communications and technology to ensure we and other brokers continue to provide much needed competition in the home loan market.”