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12-136MR ASIC takes action on car finance advertising
Money3 Corporation Limited (Money3) has agreed to change its car finance advertising following concerns raised by ASIC.
Money3, a lender which specialises in providing small amount loans as well as car finance and leasing, promised, 'When everyone else says no! We say yes!* No application refused'.
ASIC was concerned this claim was either:
misleading because the company did not in fact provide finance to all applicants who had been refused finance by other lenders regardless of their financial circumstances, or
if the company did provide finance to all applicants that had been refused finance elsewhere, it was in breach of the responsible lending obligations under the National Consumer Credit Protection (NCCP) Act.
‘This advertising gave the impression that Money3 would lend a person money regardless of their financial circumstances’, ASIC Commissioner, Peter Kell said.
‘In fact, the responsible lending laws prohibit lending money to a person if they are unable to make the repayments or could only do so with substantial hardship.’
Money3 has responded to ASIC’s concerns and has:
removed from display all posters containing the ‘No application refused statement’, and
withdrawn and destroyed all pamphlets from Money3 branches containing the statement.
‘ASIC will persist in taking action against misleading advertising to ensure consumers are given a realistic view of the financial service or product being sold’, Mr Kell said.
‘While advertising can help people make financial decisions, it’s important that information is accurate. Ultimately, we want to help consumers make informed and confident financial decisions.’
ASIC acknowledges Money3’s cooperation in this matter.
ASIC has recently taken a number of actions concerning advertising under the National Consumer Credit Protection Act, including:
HSBC to change home loan advertising (12-73AD)
ASIC takes action on car finance advertising under credit legislation (12-76AD)
Bankwest amends credit card advertising following ASIC action (12-110MR)
ASIC takes action on RESI home loans advertising (12-133MR)
ASIC is currently consulting on new guidelines for credit advertising: Consultation Paper 178 Advertising credit products and credit services: Additional good practice guidance (CP 178) with comments due by 6 August 2012.