The Bank of New Zealand has narrowly escaped censure over its “we’ve cut out brokers” advertising campaign.
Monday, December 27th 2004, 6:09PM
by The Landlord
A man in Christchurch, presumably a broker, called G Hill, complained to the Advertising Standards Complaints Board that the BNZ ad campaign was “miss-leading (sp) and dishonest”.
His argument was that BNZ withdrew from the broker market as it wasn’t doing very well there and that mortgages sourced through brokers are more cost-efficient than bank-originated home loans.
BNZ hit back at the allegations saying firstly that margins had been falling and broker commission costs had been rising.
“We felt we could offer our customers better interest rates by cutting out the middle man,” BNZ said in its submission.
It says cutting out the brokers meant a better deal for lenders. To prove its point the bank supplied some illustration of costs. The costs in the following table using “illustrative” margins and loan sizes have been used to prove its case.
