A company named New Aussie Finance Pty Limited, licensed to trade as Wizard Home Loans to the Chinese and Korean communities in Auckland, has admitted its advertising was misleading, the Commerce Commission says.
Wizard bills itself as New Zealand's and Australia's largest non-bank home lender and is backed by Dutch-based banking giant ABN Amro and PBL Ltd, the company of Australian tycoon Kerry Packer.
The ads were in breach of the Fair Trading Act and the company has settled with the commission.
The advertising, which appeared in an Auckland Chinese language publication Property Overview in February this year, included that floating rate from 3.22%, and suggesting no application, monthly or annual fees.
The commission said its investigation revealed that the 3.22% interest rate was only available for the first month of the loan, that the offer was only available on loans of $300,000 or more and that the loan was subject to a $600 application fee.
In addition, pictures and contact details of 14 employees featured in the advertising implied that all were Auckland based, when in fact 12 were based in Australia at the time the advertising was published.
Director of Fair Trading Deborah Battell said that while the advertising included a disclaimer 'terms and conditions apply' the offer was misleading in the commission's view.
"All important terms and conditions should match the offer and must be clearly and accurately disclosed. Small print cannot be used to substantially change or qualify the impression given by advertising," she said.
Wizard New Zealand boss John Grant says a lack of consultation between New Aussie Finance Pty Limited’s manager David Mao and New Zealand led to the problem.
"Had Wizard New Zealand been presented with the advertisement for sign-off prior to placement this breach would not have occurred.
"Wizard has every confidence in David Mao’s professionalism and we have started working with Mao to ensure his procedures adhere to our own requirements and, most importantly, those set out by the Commerce Commission."
"Wizard is committed to consumer transparency and we have stringent compliance procedures in place. We actively train all staff, including all new branch owners and their staff, on the requirements of the Fair Trading Act and other regulatory regimes," Grant says.
