ASIC penalises Mortgage Choice for claims of saving customers $10k over five years

Mortgage Choice Limited has paid $30,600 for three infringement notices issued by ASIC regarding false advertising.

The broker, with over 800 representatives and 160 franchises across the country, presented advertisements aired on television stations across the country, and on two websites between February 2012 and November 2012, that were the subject of the notices.

The advertisements claimed they saved customers '$10,000 over 5 years' on average by refinancing numerous home loans. The calculation behind this claim was based on projected savings on calculations from a sample study of 300 refinancing customers over a six-month period.

At the time of the advertisement, no customer had achieved this level of saving.

Each infringement notice had a penalty of $10,200. One was issued for the representations on the television, and two for the website advertising. One was on mortgagechoice.com.au, while the other was on maketherightmove.com.au. The infringement notices are now available on the ASIC website.

ASIC notes that 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.

The infringments note that one of the consequences of not paying the fine, should they then be found in contravention of the Act, would be a maximum pecuniary penalty of $1,700,000.

Deputy chairman Peter Kell said that advertising plays a crucial role in the decisions consumers make, and any claims made about potential savings must be accurate and supported by evidence.

"ASIC will continue to act in instances where advertisements contain representations about a product that are false or misleading," said Kell.