Broker not necessarily totally unbiased
Mortgage Choice in Australia has been censured by an Australian regulator for using the word "unbiased" in its advertising and could be forced to pay compensation to up to 50,000 of its customers.
Thursday, June 3rd 2004, 6:27AM
by Jenny Ruth
Mortgage Choice, which is a different company from the New Zealand one of the same name, has been claiming in published material since October 2002 that it is "totally unbiased," that it provides "unbiased home loan advice" and that its brokers are "paid the same regardless of which lender or loan you choose."
ASIC decided these claims were misleading and deceptive "given that Mortgage Choice and its franchisees only receive commission from, and provide advice in relation to lenders on its panel, and do not receive commission from, or provide advice in relation to lenders who are not on the panel," the regulator said last week.
An ASIC executive director Greg Tanzer says this case highlights the need for those in the financial services industry to ensure all claims in advertising and promotional material are completely accurate and correct.
"It also shows that claims of being 'unbiased' or providing 'unbiased advice' must be strictly correct or adequately qualified, if they are to avoid liability for misleading and deceptive conduct," Tanzer says.
Mortgage Choice spokeswoman Brooke Cummins confirms that her company pays its brokers exactly the same commission regardless which of which mortgage product they recommend to their clients.
The 27 lenders on the company’s panel represent about 80% of the market, she says. The amount Mortgage Choice itself receives varies from lender to lender.
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