It must be very tempting for marketing departments of financial institutions to push the boundaries on advertising to demonstrate how their home loan is “the best”.
However, the desire of marketing departments for differentiation from the pack needs to be tempered with the realisation that ASIC is ever vigilant in this area.
A recent example was notified by ASIC on Monday 27 October 2014. The National Australia Bank (NAB) agreed to run advertisements correcting earlier claims about its home loan interest rate that ASIC considered to be misleading. Early in October NAB published an assertion that it had “had the lowest standard variable rate for more than 5 years” in various newspapers.
Unfortunately, the NAB failed to qualify its claims to make it clear that this was only true when the comparison was made of the four major banks. The claim was untrue outside the major banks. It was clear that the NAB had not had the lowest standard variable rate on home loans over the past 5 years when all lenders were taken into account.
ASIC’s intervention in this regard is the latest of a long list of similar interventions in relation to other advertisements.