This article will assist you to review advertising requirements for your Australian Credit License as required by Australian Securities & Investments Commission (ASIC).
ASIC Regulatory Guide 234 (RG234)
ASIC Regulatory Guide 234 (RG234) is the regulatory guide relating to all participants within the financial services industry. As part of the Australian Securities & Investments Commission's (ASIC) ongoing work in 2015 whilst monitoring advertising, ASIC became aware of advertisements which were not compliant under the legislation.
Advertisements may 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.
Below are some guidelines.
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 licence number needs to be disclosed as 'Australian Credit Licence XXXXXX' 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 (ie. a much smaller font) this is a breach of s164(2) of the NCCP Act.
Use 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. 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.
Reasons why
Regulatory Guide 234 sets out your guidelines to prevent deceptive conduct that may influence or mislead a consumer.
Regulatory Guide 234 covers all facets of advertising not just mortgage brokers.
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
Review all Marketing campaigns, Websites, Facebook or social media advertising and if you are a credit representative, provide these to your licensee. Connective Credit Representatives must refer all advertising to the Senior Compliance Managers for approval before going to market.
Ensure licensing statements are clear and correct i.e. suggested wording would be: “<Company/Business Name> (Credit Representative Number xxxxxx) is authorised under Australian Credit Licence Number XXXXXX”
Download and read RG234.
Seek independent legal advice if required.
Review ASIC information sheet 103 relating to how licensing should read (http://www.asic.gov.au/asic/asic.nsf/byheadline/Getting+a+credit+licence?openDocument#numbers).
For further guidance please email [email protected].