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Wednesday 24 April 2013

13-088MR Fair Finance Australia pays infringement notice penalty

ASIC has issued an infringement notice to Foresters Community Finance Ltd (trading as Fair Finance Australia) for false or misleading advertising.

In October 2012 Fair Finance advertised on its website the effective annual interest rate on certain loans was 19.95%, when the interest rate under the relevant credit contracts was in fact 35%.

ASIC subsequently contacted Fair Finance who removed the ad. Fair Finance contended the ad was a result of compliance failure.

‘Accurate advertising, especially in providing credit, is essential so consumers are not misled and put in a potential situation where they take on too much debt and are unable to repay,’ ASIC Commissioner Peter Kell said.

Fair Finance paid a $6,600 penalty on 22 March 2013.

Background

Fair Finance’s payment of the infringement notice is not an admission of a contravention of the ASIC Act. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

ASIC released is guidance on credit advertising in November 2012 (refer: 12-282MR).

Previous ASIC actions over potentially false and misleading ads include:

  • 12-198MR GE Money changes personal loan online advertising

  • 12-197MR ASIC takes action on payday loan advertising

  • 12-153MR RAMS changes advertising in response to ASIC concerns

  • 12-73AD HSBC to change home loan advertising

Last updated: 24/04/2013 12:00