The successful prosecution of a mortgage broker for claiming he shopped around for the best deal for his clients but didn’t is a "wake up call" for many in the mortgage broking industry who have tended to bend the rules on advertising, says New Zealand Mortgage Brokers Association (NZMBA) chairman Brian Berry.
"It’s a good reminder to everyone of advertising standards and the importance of disclosing what your true position is when dealing with a client," Berry says.
Finance and mortgage broker Graeme Charles Fisher was fined $9,000 for breaching the Fair Trading Act by claiming in radio advertisements that he shopped around for the best deals.
In fact, he put almost all loans through one finance company, Blenheim Finance, of which he was a director and 50% shareholder. When the Commerce Commission conducted a random sample of 30 loans it found they were more expensive that those available from other financiers.
Berry says he doesn’t believe Fisher is an NZMBA member.
"In his instance, he was tied to one product. If you’re a specialist mortgage broker, you have a range of products available. It’s all about disclosing that to your client," Berry says.
"We want our members acting in the best possible ways and certainly misleading advertising isn’t one of those ways."
