Ability Finance Broker

Ability Finance are serious about conforming to the guidelines set out by the MFAA. If you feel that anything we say may be misleading please  let us know without delay. Below is a copy of the guidelines we abide by.

Advertising Guidelines for Mortgage Brokers within Australia
MFAA members are required to follow these advertising guidelines

MFAA ACTS TO PREVENT HOME BUYERS FROM BEING MISLED

The Mortgage & Finance Association of Australia (MFAA) has issued a guidance paper to its members on how to avoid misleading home buyers.
The paper provides mortgage brokers and lending institutions with general principles and specific risks to avoid when designing advertisements, brochures, websites and statements.
MFAA Chief Executive, Phil Naylor, says misleading advertisements usually do not stem from calculated attempts to deceive consumers, but from the writer’s or presenter’s mismanagement, inadvertence or naivety.
“There have been few instances of misleading advertising in the mortgage industry and we want to keep it that way. We are trying to ensure that our members are aware of how advertising can breach the Trade Practices Act, the ASIC Act, consumer protection legislation in each state and the MFAA Code of Practice.
“To ensure people take notice of the guidelines we have kept them deliberately short but informative.
“Our paper warns against using high-risk words such as: independent, impartial, unbiased, best, cheapest, lowest rates, guaranteed and free. Any advertising that uses these words has to be carefully checked for accuracy and truthfulness,” Mr Naylor says.
Many people also don’t realise that even though a statement is literally true, an advertisement may be found to be misleading if material information is omitted, he says. “The omission of facts can be as misleading as the inclusion of misleading or inaccurate statements.”
There are other key principles that the MFAA covers to ensure that its members understand how they may inadvertently break the law.
• The overall impression is important. The impression created by a strong positive statement in the main text of an advertisement may not be overcome by qualifications or exceptions included in the fine print, the MFAA’s guidelines state.
• Whether something misleads or is likely to mislead depends on the understanding of the actual audience that receives the message. Some in the audience may be unsophisticated or have limited knowledge of the mortgage industry.
• The law can be breached even if there is no intent to deceive or mislead. And it is not necessary for someone to have been misled for a breach to occur. Nor is it a defence to be able to prove that the consumer was fully advised of the true position before signing up for the product – where an advertisement is misleading it would still be in breach of the law.
“This is another move to add to the professionalism of the mortgage industry. We are working closely with regulators, legislators [and consumer groups] to ensure high standards of practice within the profession,” Mr Naylor says.
About the MFAA
The Mortgage & Finance Association of Australia (MFAA) is the peak body providing service and representation to over 8,000 mortgage brokers, mortgage managers, mortgage lenders (bank and non-bank), and originators to assist them develop, foster, and promote the mortgage industry in Australia.
The MFAA is dedicated to promoting and maintaining high standards of professionalism and ethical behaviour, and provides a united voice for the industry when required. MFAA strongly emphasises the responsibility that members have to act in the best interests of consumers. All MFAA members must belong to an ASIC approved independent dispute resolution scheme such as the Credit Ombudsman Service Limited.
The www.MFAA.com.au website contains useful information for home buyers including calculation tools, guides to the mortgage industry, and a search engine to find a local accredited MFAA member.


MFAA ADVERTISING GUIDELINES
The purpose of these Advertising Guidelines is to assist MFAA members in framing their advertisements so they do not breach the misleading and deceptive advertising provisions of the Trade Practices Act, the ASIC Act, State consumer protection legislation and the MFAA Code of Practice.

Note: These guidelines are for members’ general assistance and do not constitute legal advice.

Members should seek their own legal advice on their own specific circumstances or advertising. The misleading conduct provisions require that a business must not in its business activities engage in any conduct that misleads or deceives or is likely to mislead or deceive consumers. As well as direct advertising, the requirement covers representations made during meetings with customers, over the phone, in brochures, on websites and so on.

The MFAA Code of Practice also requires that a member’s advertising will not be ‘misleading, dishonest or deceptive’.

It is extremely important that members continually review all advertising and marketing material to ensure that that material complies with relevant legislation. Advertising can be innovative, exciting and competitive; but it must also be honest, balanced and accurate.

Be warned! The penalties for misleading and deceptive advertising and other practices can be very costly.

Some Key Principles

Overall Impression

Whether the ‘don’t mislead’ principle is contravened depends on the overall impression created.

A selling approach that seems clear and well structured to its designers may lose its intended message upon presentation to its audience. This can happen for many reasons.

These may include the use of assumptions or pre conceptions of the audience or designers. The impression created by a strong positive statement in the main text of an advertisement may not be overcome by qualifications or exceptions included in the fine print. It is recommended that you take great care in advertising and not be ambiguous with any claims or statements.

Audience

The target audience of an advertising campaign may be very different to the actual audience that receives the message. What matters is the understanding of the audience that actually receives the message.

Members of that audience may be unsophisticated or have limited knowledge of the mortgage industry and its products and services.

Even if only the more susceptible members of your actual audience are misled, the consumer protection legislation and the MFAA Code of Practice will have been breached.

Intent

It is important to realise that purpose or intent does not have to be proved to establish a breach of the misleading conduct laws or the Code. It is the likely effect of the representation that counts.

Advertising may be found to be misleading or deceptive irrespective of whether you had any intention to mislead or deceive at all.

Further, it is not necessary for someone to have been misled for a breach to occur. A Court or tribunal may find that the words or other material in an advertisement are capable of misleading or likely to mislead members of the target audience even in the absence of any evidence that particular consumers were mislead. Another point to note is that although a representation to a customer or a statement in an advertisement may be literally true, it may still be in breach. This will be the case if material information is omitted and, as a result, the overall impression created is misleading. Remember that the omission of crucial facts can be as misleading as the inclusion of misleading or inaccurate statements. Many misleading advertisements do not stem from calculated attempts to deceive, but from the writer’s or presenter’s mismanagement, inadvertence or naivety. Remember that how you present a product, service or offer may not be the way it is received by the audience. You need to put yourself in the receiver’s position and be objective. Also note that it is not a defence to say that you corrected the misleading effect of an advertisement before the customer signed up for the product. For a breach of the law to occur, it is enough that the consumer was likely to be mislead at the time they initially received the
statement or other representation. Risks to Avoid that are Specific to the Mortgage Industry

Advertising which uses the following words needs to be carefully checked for accuracy and truthfulness:

“Independent’ ‘Impartial’ or ‘Unbiased’ Advice

Is the advice being given, independent, impartial or unbiased and not influenced by factors other than the consumer’s best interest? If a broker receives commissions or other benefits from a lender there is potential for the broker to be influenced by factors other than the consumer’s best interest. In the MFAA's view, you cannot describe yourself, without qualification, as "independent" and/ or "impartial" and/or "unbiased" if you have a panel of lenders that pay you a commission, and you do not recommend lenders from whom no commission is received.

However, you may be entitled to state that you are impartial or unbiased (assuming you are) in your recommended choice of loans from among your panel of lenders. In the MFAA's view, the term 'independent’ should only be used to emphasise ownership of the entity e.g ‘we are an independently owned broker’. Possible alternative descriptors might be ‘professional’ or ‘MFAA-accredited’

The ‘best’ deal

It is impossible to demonstrate, at any point of time, in the large and competitive mortgage market that a deal is the ‘best’ deal. Advertising should avoid such terminology and similar expressions like ‘cheapest’ or ‘lowest rates’. Possible alternatives could be - 'We help you find a loan suited to your needs from our panel of lenders’

‘Guaranteed’

You should not use the word ‘guaranteed’ unless you are making a contractually binding promise, and, if so, you must make the precise terms of that promise clear. Generally, as terms and conditions are too wordy for practical use, the term ‘guaranteed’ should be avoided.

‘Free’

Is the service you are providing really free or are there other costs the consumer might incur or benefits they might be giving up? You may want to consider different terminology such as ‘Our service to you is free but other fees may apply’.

Use of Charts, graphs, images, on-line calculators

Charts, graphs, images or on-line calculators, either by themselves or in combination with each other or with words, may create a misleading impression. You need to ensure that the likely audience will not obtain a misleading impression from the material as a whole. If a calculator or chart is based on assumptions, those assumptions should be stated, particularly if they differ from
what the audience might assume.

Subjective statements

You should not use subjective statements such as ‘We believe that interest rates will rise in the next three months’ unless the stated belief or opinion or point-of-view is held in good faith and is reasonably based.

“Subject to conditions”

Use of ‘subject to conditions’ and similar phrases is unlikely to protect you from misleading your audience if the terms and conditions of a loan being recommended are less favourable to the consumer than the advertising suggests. If an understanding of the terms and conditions is likely to change the customer's perception of the product or service you are presenting, you probably need to reconsider your advertising strategy. Where an attractive offer is subject to conditions that are likely to be unattractive from the consumer's perspective, those conditions should be presented as prominently as the offer itself.

Comparative Advertising

If you use comparative advertising, always ensure the claims being made about competitors' products and services, as well as your own, are 100% accurate and that relevant information is not omitted. Extreme caution must be exercised as competitors are most likely to complain!

If you are making comparisons, make sure you are comparing ‘apples with apples’.

For instance, it is misleading to say that a line of credit or offset account product can be paid off more quickly than a standard product if this result can only be achieved by making larger or more frequent payments. If you suggest otherwise, you are not comparing 'apples with apples', and may find you have breached the misleading and deceptive conduct provisions.