A complaint about the timeliness of mortgage rate comparisons was upheld by the Advertising Standards Complaints Board.
The complaint related to an advertisement by Wizard Home Loans, published in the Sunday Star-Times on September 24 last year. It included a list of variable mortgage rates from seven lenders including Wizard itself, while it was noted below the list that the rates were current at August 30.
The person who complained said that he didn't believe it was acceptable to advertise rates with a time lag of 24 days, especially in a volatile interest rate environment. He said that the validity date of the rates should be in bold print and included in the heading "Variable Rate".
The Board considered this complaint in light of the Code for Financial Advertising, basic principle 3, which says:
"Financial advertisements should strictly observe the basic tenets of trust and clarity and should not by implication, omission, ambiguity, small print, exaggerated claim or hyperbole mislead, deceive or confuse, or be likely to mislead, deceive or confuse consumers, abuse their trust, exploit their lack of knowledge or, without justifiable reason, play on fear."
However, the advertiser argued that the date the rates were current was clearly stated. It said that Wizard's rate was also true to that date and had not been adjusted to reflect a subsequent rate decrease, so it did not give Wizard a clear advantage over the competitors listed.
"Wizard has now removed all competitive rate comparisons from their advertising due to the large number of interest rate movements that have occurred in the market. These movements cannot be controlled and also make it very difficult to keep newspaper advertisements up to date with the material deadlines of newspapers."
Meanwhile, the Sunday Star-Times said on behalf of the media that the advertisement had been accepted in good faith as being correct when supplied. However, it sought a directive from the Board and suggested that rates be updated a week before publication, given the volatility of the market and the fact that direct comparisons were being made to competitors' rates.
The Board upheld the complaint, taking the view that clarity and timing was critical in financial advertising of this nature. It said that, if an advertiser was going to compare rates, the rates used must be the latest possible rates available.
The Board also said that, as the media considered that updating rates a week prior to publication was feasible, it fully supported the prospect for such a practice. It also pointed out that the reason for the high standard of social responsibility expected of financial advertisements was because consumers often relied on such services for their financial security.