Do you remember any of those too good to be true sounding investment property advertisements that were aired on television channels 9, 10, 11 and GEM for the majority of 2014? The ones that said you could pay your mortgage in 8 years instead of 30, increase your net worth to $100,000, or purchase investment property, all for the low cost of $59 per month? Well, the reason they sounded too good to be true is because they were – and ASIC has finally taken to task the businesses responsible for producing these misleading advertisements.
A couple of different companies associated with Nicheliving, a Perth based property developer, have been issued infringement notices related to misleading advertisements. Most notable is the 4 infringement notifications served to the Australian Property Alliance (APA), who will have to pay $40,080 in fines.
ASIC singled out a series of advertisements that claimed that individuals could purchase investment property for $59 per week. The problem with these advertisements was that they failed to make any mention of qualifications or assumptions that were required to arrange the purchase of the property. The most significant of these requirements was that the purchaser must enter into a mortgage in order to finance the property, in addition to coming up with a $35,000 deposit.
In a statement released by ASIC, deputy chairman Peter Kell stressed the importance of clear and balanced advertisements that represented the full scope of the agreement that a consumer would be entering into. Moving forward, APA has agreed to work with independent compliance consultants to both conduct staff training regarding appropriate advertising and to review any current compliance policies held by the company.
While there certainly is more work cut out for ASIC to eliminate misleading property advertisements, it is good to see the regulators step in and put a stop to blatantly incorrect material which will hopefully make others in the industry pull their head in.