Less of the Hyperbole, Australian Mortgage Brokers Told

Mortgage brokers are under pressure to tone down their advertising as the industry moves to stem criticism that their pitch is often based on exaggerated or inaccurate claims.

The Mortgage Industry Association of Australia yesterday released guidelines for companies to follow after years of hyperbole in advertisements, including firms claiming to be “unbiased”, “cheapest” or “independent”.

The guidelines suggest that brokers might use the phrase “we help you find a loan suited to your needs from our panel of lenders” as a good alternative to advertising the cheapest loans or claiming to be independent.

Brokers are already taming advertisements, chastened by the experience of Mortgage Choice, which was forced to run corrective advertisements after claiming in May it was “unbiased” even though it only recommended loans from the lenders that had paid it commission.

Phil Naylor, the chief executive of the Mortgage Industry Association of Australia, said advertising using words like independent, impartial, best, cheapest, guaranteed and free had to be carefully checked for accuracy and truthfulness.

“We don’t want to write an advertising manual for them, we’ve really said ‘we don’t want to dampen your imagination, your enthusiasm and so forth but beware if you use certain words you may be in breach of the guidelines and the law’.”

The guide prohibits brokers from describing their advice as independent, impartial or unbiased if they only recommend lenders who pay commission – which is how the system works for most brokers.

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