The Australian Competition and Consumer Commission has instituted Federal Court proceedings against the Commonwealth Bank of Australia alleging false, misleading or deceptive advertising in one of its home loan campaigns.
The Cricket Home Loan Campaign ran from 22 November 2001 to 27 January 2002 as part of the bank’s No Regrets themed advertising.
The ACCC alleges that the bank's television advertising and part of its in-branch advertising for that campaign:
- breached section 52 of the Trade Practices Act 1974, which prohibits misleading or deceptive conduct
- breached section 53(c) of the Act, which prohibits misleading representations as to the benefit of goods or services
- breached section 53(e) of the Act, which prohibits misleading representations as to price
- breached section 53(g) of the Act, which prohibits misleading representations concerning the existence or effect of any condition.
The advertisements were broadcast during cricket telecasts. The advertisements featured cricket spectators and a cameraman doing things they would later "regret" and promoted the bank's home loan as "something you won’t regret". Prominently displayed during these advertisements was the caption "No establishment fee". In fine print at the bottom of the advertisements were the words "Limited offer for selected Home Loans. Other fees and charges are payable. Minimum loan amount and conditions apply".
In-branch advertising also carried "no establishment fee" captions in bold text, with footnote conditions saying "Fees and charges are payable. Conditions apply".
To obtain a home loan without paying an establishment fee prospective home loan customers had to either currently hold, or take out, an additional two or three bank products such as a credit card, deposit account, combined home and contents insurance policy or mortgage protection insurance.
The ACCC has alleged that the clear impression conveyed by the advertisements was that customers applying for these home loans who met standard home loan requirements (such as creditworthiness) would not incur an establishment fee.
The ACCC has alleged that the fine print conditions were inadequate to dispel that impression.
The ACCC is seeking court orders including:
-declarations that the bank has breached sections 52, 53(c), 53(e) and 53(g) of the Act;
- injunctions restraining the bank from advertising home loans as being available without payment of an establishment fee if other products are required to be held or obtained by the customer to qualify, unless this is clearly specified
- refunds
- orders requiring the bank to publish corrective advertising nationally on the same television station and in branches
- costs.
The ACCC's investigation and court action followed complaints from December 2001 from prospective home loan customers that they would have to pay an establishment fee.
A directions hearing has been set for 24 October 2002 at 9.30 a.m.