That’s much to the delight of Wizard Home Loans boss John Grant who laid a complaint about Kiwibank’s "home loan guarantee" with the commission last September.
The offending advertising ran during September and October in newspapers and on television. The television commercial screened 94 times during this period.
"Contrary to its advertising, Kiwibank did not in fact guarantee ‘cheaper’ or ‘the cheapest’ home loans. Instead, it intended to match, rather than undercut a competitor’s rate if it were proven that over a six-year period, an equivalent product was cheaper," the commission says.
It also considers Kiwibank’s advertising suggested it would undercut loans made by any home lender when the offer applied only to equivalent home packages by banks with branches nationwide.
Kiwibank has changed its advertising to correct these misleading statements.
"If competition is to be effective, consumers need to be able to rely on the information provided by companies so that they can make an informed choice about which of the goods and services they will buy," says Deborah Battell, director of the commission’s fair trading branch.
The commission’s verdict is in line with Wizard’s legal opinion from KPMG Legal which said the advertising was deceptive and misleading.
Kiwibank chief executive Sam Knowles says Kiwibank has "fully accepted" the commission’s ruling. "We have taken a quite aggressive position in promoting our home loans as we genuinely believe we have the best loans available of the main trading banks," Knowles says.
"We also want to offer a fair and transparent deal for consumers, so we are happy to be more specific about how the guarantee works and who we are competing with.
Grant says Wizard feels "absolutely" vindicated in making its complaint.
