Metricon Homes Pty Ltd (Metricon) has paid $50,400 in penalties after ASIC issued four infringement notices for misleading advertising aimed at first home buyers.
Metricon’s '2K on your way' campaign for its 'HomeSolution' house and land packages (HomeSolution) contained misleading representations about eligibility to qualify.
The HomeSolution advertisements created the impression that consumers who qualified for the first home owner grant could obtain a Metricon HomeSolution house and land package with a $2,000 deposit. However, consumers were still required to fund the balance of the prescribed 5% deposit (approximately $30,000 on a typical $600,000 package, but could be as much as $41,000 on a $825,000 package). This additional amount was financed through an unsecured personal loan, typically through one of Metricon’s associated finance brokers.
Any disclaimer in the HomeSolution advertisements was not prominent enough to effectively qualify the dominant message of the advertising. Consumers were also required to navigate through links on Metricon’s website to the HomeSolution landing page where eligibility conditions were listed in small font at the bottom of that page.
In response to ASIC’s investigation, Metricon has withdrawn the concerning advertising and ceased promoting its '2K on your way' offer.
ASIC reminds all financial services firms to regularly review their advertising compliance arrangements. ASIC proactively monitors all forms of advertising, including advertising on-line, and will take action in appropriate circumstances.
Background
The misleading advertisements appeared in radio, print, outdoor, electronic and online formats throughout Victoria, Queensland and South Australia between July 2017 and February 2018.
ASIC has issued Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance (RG 234) setting out our guidance to help promoters comply with their legal obligations not to make false or misleading statements or engage in misleading or deceptive conduct.
ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws under the ASIC Act.
The payment of an infringement notice is not an admission of a contravention of the ASIC Act consumer protection provisions.