The updated Regulatory Guide 234 ‘Advertising financial products and services (including credit): Good practice guidance’ (RG 234) has been built on ASIC’s commitment to promoting confident and informed investors and financial consumers.
RG 234 has expanded on guidance originally published in February this year and applies to all financial products regulated by ASIC, including credit facilities, however it focuses on the advertising of investment and risk products as well as financial advice services.
ASIC commissioner Peter Kell said the guidance expands on the regulator’s commitment, since assuming responsibility for credit in 2011, and ensures that the promotion of credit products and services is clear, accurate and balanced.
“This guidance includes a number of additional explanatory comments and examples to illustrate best practice when it comes to advertising credit products and services,” Mr Kell said.
“It is intended to help industry participants avoid making false or misleading statements or engaging in misleading or deceptive conduct, ultimately [leading] to improved standards more generally.”
RG 234 now includes new information on balanced messages about credit product and services returns, features, benefits and risks, fees and costs, interest rates, comparison rates, product sustainability claims, the nature and scope of credit assistance and restricted terminology, such as ‘independent’, ‘impartial’ and ‘unbiased’.
Mr Kell reminded promoters of credit products and services, in addition to the publishers of advertising for these products, that ASIC would be regularly reviewing ads.
“We encourage industry participants to carefully review our guidance to help them understand their obligations,” he said.
Since the publication of RG 234 in February this year, a total of 54 advertisements across the financial services and credit sectors have been withdrawn or remedied, following ASIC action. The advertisements raised concerns about poor practices and potentially misleading or deceptive conduct.
“ASIC has shown we will take swift action when confronted with misleading or deceptive advertising,” Mr Kell said.
“When we see false claims, we will seek outcomes that involve potentially stronger penalties than we have sought in the past.”
Powers at the regulator’s disposal include issuing stop orders and public warning notices, and seeking civil pecuniary penalties.
