ASIC strikes credit provider for misleading info

Yasmine Raso

Senior Journalist, Financial Newswire

20 February 2023

The Australian Securities and Investments Commission (ASIC) has cracked down on financial services companies housing potentially false or misleading information on their websites, particularly estimate calculators.

The corporate watchdog has made an example out of credit provider, Jacaranda Finance, issuing two infringement notices related to concerns its online repayment estimate calculator was false or misleading.

This was due to:

• “the annual percentage rate used in the calculator was significantly less than the rate that applied to most consumers who entered a credit contract with Jacaranda; and
• the calculator was advertising loans at an annual percentage rate that Jacaranda did not offer.”

“ASIC was concerned that consumers were relying on the estimated repayments that the calculator generated when deciding whether to apply for a loan and would use this information to determine whether a loan was appropriate for them,” ASIC Deputy Chair, Sarah Court, said.

“This information was misleading and could have led consumers to apply for a loan that was more costly than they had expected.

“ASIC will continue to promote the confident and informed participation of consumers in the financial system, by requiring lenders to ensure that the information on their websites accurately reflects the credit product being offered.”

Upon commencement of the investigation in September 2022, Jacaranda removed the calculator from its website and complied with the infringement notices, paying $26,640 on 8 February 2023.