ASIC has released updated Regulatory Guide 234: Advertising financial products and services (including credit): Good practice guidance. (RG234)

Credit providers should review your marketing clearance procedures to ensure your advertising complies.

The Guide has been amended to cover advertising in all media including mobile phone messages (e.g. SMS, MMS, text messages) and online banners.

It does not specifically refer to QR Codes, mobile versions of websites or meta tags but the clear intent is to cover all forms of credit advertising.

The Guide includes new examples specifically relevant to credit.

It also includes new sections on interest rates, comparison rates, responsible lending, credit assistance and canvassing of credit at home.

Specific comments are made about credit contracts structured with an initial promotional period, where a discount interest rate applies and/or other fees are waived, before the interest rate and fees revert to a higher level on an ongoing basis.

• If an advertisement includes details of this interest rate or fees, ASIC says it should state, with equal prominence, the period for which the discount applies.
• “The advertisement should also describe what the interest rate or fees revert to (e.g. the standard variable rate), but this need not be stated with equal prominence to the discount rate or fees. The degree of prominence required depends on any unusual features of the discount rate or period. For example, we would expect the following reversion rates to be stated more prominently:
  (a) if the advertisement is for a honeymoon interest rate on a home loan and the reversion rate is something other than the lender’s standard variable rate; or
  (b) if the advertisement is for a discount interest rate for a balance transfer on a credit card and the reversion rate is the higher cash advance interest rate rather than the standard purchase interest rate”.
• “The advertisement also need not state the current amount of the discount rate or fees, unless the advertisement puts emphasis on savings that would be obtained during the discount period only, but without clarifying that these savings would not continue during the entire period of the loan”.

Comparison rates
ASIC says that “ensuring that the comparison rate is no less prominent than the interest rate does not necessarily mean that they must be presented identically (e.g. both in the same colour and against an identical background). However, if the interest rate is bright and the comparison rate substantially less vivid by comparison, or blended into the background because of a lack of colour differentiation, then even if they are shown in the same font size, it is likely that the comparison rate would be considered less prominent…

Where the advertisement is in the form of an online banner advertisement, it may not always be possible to include the warning on the same page as the comparison rate. It will be sufficient that, at a minimum, the advertisement contains a clear link or reference to the warning, and the reference should be as near to the comparison rate as possible. The reference should use clear language to help make the consumer aware that this is important information that they should consider before making a decision about the product (e.g. ‘comparison rate warning’ or ‘important information about the comparison rate’).”