One lender has been penalised almost $41,000 less than a month after the MFAA spoke out against the “widespread industry practice” of “false home loan advertising”.
The MFAA recently warned brokers that it is illegal to make headline claims that are invalidated by the fine print, and that ASIC and the ACCC “regularly raise concerns” about such conduct.
Now UBank has been forced to pay $40,800 in penalties after ASIC issued four infringement notices for “potentially misleading advertisements”.
ASIC said the penalties related to an advertising campaign for a home loan product that ran from December 2013 to March 2014.
Each infringement notice imposed a penalty of $10,200.
The misleading claims were made in an advertising campaign that promoted an offer of a $2,014 gift card for consumers who obtained a home loan with UBank.
ASIC said it was concerned that “some details of UBank’s offer were not disclosed in some of the advertisements”, while others “were not disclosed in a clear and prominent manner”.
Those details included a minimum loan amount of $350,000 and an obligation to provide all documents in five days, according to ASIC.
Other details included a requirement to use an electronic settlement process for refinanced loans and a cap on the number of consumers eligible to receive the offer.
“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,” it said.
UBank’s penalty has been paid by its parent company, NAB. The payment of an infringement notice is not an admission of a contravention of consumer protection provisions.
ASIC deputy chairman Peter Kell said the regulator’s crackdown on misleading advertising had resulted in action against 10 companies this year.
“ASIC will continue to take action where we believe firms have not provided clear, consistent information in their advertising,” he added.