In September this year, ASIC issued an infringement notice to Fundo Loans Pty Ltd for $19,800 for breaching s12DB(1)(e) of the ASIC Act, which deals with making false or misleading representations.
So what did Fundo Loans do that got them into trouble?
ASIC alleged that Fundo’s website was showing a misleading claim that it offered ‘no credit check loans’ of up to $5,000.
The problem here is that from January 2024, Fundo required all applicants to consent to a credit check, and then proceeded to conduct credit checks on at least some of the applications.
This action against Fundo as a provider of small amount and medium amount credit contracts appears to be in line with ASICs stated priority of protecting vulnerable customers, but we think it does hold wider lessons for Australian Credit Licence holders, particularly where a website is showing a misleading claim (that the fine print tries to disclaim away), or by inadvertently showing information that is out of date.
Does your advertising actually reflect how your business operates?
And, perhaps just as importantly, is the information you’re advertising still current?
We all know how easy it is to publish something on a website, launch a digital advertising campaign and then move on to the next thing.
It might be time to check the “set and forget” stuff that your business has out in the big wide world:
- Is your website showing current information and does it reflect how you actually do business?
- Are you digital ads showing interest rates that are actually available?
- Are you also displaying the required comparison rate — and is it at least as prominent as the advertised interest rate?
- Are important conditions or eligibility being disclosed clearly, rather than buried in the fine print?
Most of the time, errors are usually because of poor review processes and are not deliberate.
But we still see daily ads on Google from licensees that are showing rates that haven’t been available in the market for at least 6 months or more, or only show the headline rate and no corresponding comp rate which is a big no no.
If ASIC is already taking action in this space, how long before an outdated interest rate or misleading digital advertisement attracts similar attention? It might be worth taking a minute to take stock
(Hint: if you are not sure where to start, we know a good compliance outfit that would love to help!)
Photo by Insaanu Studio on Unsplash