Broker not necessarily totally unbiased

Sunday 6 June 2004

Mortgage Choice in Australia has been censured by an Australian regulator for using the word "unbiased" in its advertising and could be forced to pay compensation to up to 50,000 of its customers.

By The Landlord

Last week, the Australian Securities and Investments Commission (ASIC) accepted an enforceable undertaking from the broker that it would not use the word "unbiased" in advertising unless it made clear that it only sold products from 27 lenders who paid it commissions.

Mortgage Choice, which is a different company from the New Zealand one of the same name, has been claiming in published material since October 2002 that it is "totally unbiased," that it provides "unbiased home loan advice" and that its brokers are "paid the same regardless of which lender or loan you choose."

ASIC decided these claims were misleading and deceptive "given that Mortgage Choice and its franchisees only receive commission from, and provide advice in relation to lenders on its panel, and do not receive commission from, or provide advice in relation to lenders who are not on the panel," the regulator said last week.

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