How do I ensure that my advertising and promotional activities are compliant?

May 14th, 2018

Advertising your business and promoting the range of services you provide is a great way to attract potential customers and increase your business revenue. But there are many rules that go with financial services advertising, so how can you be sure you’re getting it right?

When advertising your financial services, it is very important that your advertisements comply with the National Consumer Credit Protection Act 2009 (NCCP) to safeguard customers against conduct that is likely to influence or mislead.

These advertising guidelines are set out in ASIC’s Regulatory Guide 234 and we encourage you to download the guide and familiarise yourself with the content. To make all this information a little easier to absorb, we have distilled the hot topics our brokers encounter around advertising into an easy reference to help you avoid falling foul of the regulator.

Ready? Then let’s get started!

Advertising Terminology

One of the most important considerations when creating your adverting is the wording you use to convey your message. You must ensure that your advertising does not create a misleading impression for your customers by the way it is worded. A list of words that ASIC do not approve of includes, but is not limited to:

• Free service
• Best – examples such as “we find the best loan” or have access to the “best rates”
• Massive savings (or a quantified amount, such as “we can save you $75,000 over the life of your loan!”)
• Independent service
• Guaranteed

Connective recommends that you follow best practice and use terminology from the legislation such as:

• Find the right home loan for your needs / circumstances
• Personalised assistance
• Complementary
• We provide you with competitive choices.

Disclaimers

People and businesses advertise for a reason. Advertising can be very powerful and it can tempt a customer to make a decision to take up a product solely on the basis of how or what you advertise, which can lead to poor financial decisions. So, to control your customer’s enthusiasm, disclaimers are required to inform them that the advertisement by its nature will not contain all the information required to make a considered decision. For example: “Your full financial situation would need to be reviewed prior to acceptance of any offer or product.”

Competitions

Competitions can be an effective method of engaging with new and existing customers and are also a great way to generate leads and grow your customer base. When attracting new customers through your competition, a sure-fire way to get them offside is with the proverbial ‘fine print’ – which can quickly turn the first experience they have with your business from a positive one to a poor one.

So how do you avoid the pitfalls? Put simply, the answer is clarity and disclosure:

• Always make sure that the terms and conditions match the competition / advertisement
• Be clear on precisely what the customer needs to do to qualify for any prize or reward
• Have a clear disclaimer such as “Refer to full Terms and Conditions” and a link to them.

Social Media

Social media is increasingly effective as a marketing tool. Most mortgage broking businesses these days have a social media presence of some kind. Advertising on these platforms is a cost effective and easily scalable way to reach customers through likes and shares of your page or even with sponsored ads in news feeds and banners. When using social media to connect with customers, you need to have your licencing details listed as well as a link to your privacy policy to let people know how you safeguard any information provided to you.

Other hints and tips:

Don’t forget that there are other requirements when advertising your business, such as having a Privacy Policy available to your customers on your website and social media. There are also important rules around advertising interest rates, like including a comparison rate which is just as clear as the interest rate you are promoting. These requirements are clearly laid out in ASIC’s Regulatory Guide 234 but if you’re a Connective Member, the Compliance Team have made it easier for you by putting the details in Connective Wiki. Simply click on your Wiki icon in Mercury and type your question into the search bar to find out what you need to know.

Once completed, you can send your advertising to the Compliance Team to be checked to ensure it is compliant. We’ll also proofread it for you to ensure there are no typos! (This step is compulsory for our Credit Representatives.) Simply email us at compliance@connective.com.au

If you’re not a Connective Member and you’d like to know more, talk with your local Connective Broker Support Manager. Simply fill out the form on this page and we’ll be in touch soon to make a time that’s convenient for you.