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12-282MR ASIC updates guidance on advertising to expand on credit
ASIC has today released updated guidance to help promoters comply with their legal obligations when advertising financial and credit products and services.
The updated Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance (RG 234) revises and extends our guidance on advertising credit products and services, and builds on ASIC’s commitment to promoting confident and informed investors and financial consumers.
RG 234 expands on guidance originally published in February 2012. That guidance applied to all financial products regulated by ASIC (which includes credit facilities), however it focused on the advertising of investment and risk products and financial advice services.
Commissioner Peter Kell said today’s guidance built on ASIC’s commitment, since assuming responsibility for credit in 2011, to ensuring that advertising of credit products and services is clear, accurate and balanced.
‘This guidance includes a number of additional explanatory comments and examples to illustrate best practice when it comes to advertising credit products and services. It is intended to help industry participants avoid making false or misleading statements or engaging in misleading or deceptive conduct, and ultimately lead to improved standards more generally.’
The updated RG 234 includes new information on credit products and services, covering:
- balanced messages about the returns, features, benefits and risks of the product or service, including warnings, disclaimers, qualifications and fine print;
- fees and costs;
- interest rates;
- comparison rates;
- product suitability claims in advertisements, including responsible lending;
- nature and scope of credit assistance; and
- restricted terminology ( e.g.: ‘independent’, ‘impartial’ and ‘unbiased’).
Mr Kell reminded promoters of credit products and services, and publishers of advertising for these products and services, that ASIC will be regularly reviewing ads.
‘We encourage industry participants to be carefully review our guidance to help them understand their obligations,’ Mr Kell said.
Since the publication of RG 234 in February 2012, 54 advertisements across the financial services and credit sectors have been withdrawn or remedied following ASIC action. These ads raised concerns about poor practices and potentially misleading or deceptive conduct. Of these 54 actions, 40 actions have been taken in relation to ads for credit products or services.
‘ASIC has shown that we will take swift action when confronted with misleading or deceptive advertising. When we see false claims, we will seek outcomes that involve potentially stronger penalties than we have sought in the past’, Mr Kell said.
Powers at ASIC’s disposal include issuing stop orders and public warning notices, and seeking civil pecuniary penalties.
ASIC’s final guidance on ads responds to feedback received on Consultation Paper 178 Advertising credit products and credit services: Additional good practice guidance (CP 178).
ASIC’s guidance also contains real examples of where we have raised concerns with promoters and as a result the ad has been changed.
- Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance (RG 234)
- Report 313 Response to submissions on CP 178 Advertising credit products and credit services (REP 313)