Four infringement notices were issued to APA, resulting in payment of $40,800, for misleading advertisements published on various websites administered by APA, the Nicheliving Facebook page, YouTube, as well as on television channels 1, 9, 10, 11 and GEM during the period 14 May 2014 to 16 October 2014.
ASIC has issued infringement notices on Australian Property Alliance Pty Ltd (APA) and imposed new licence conditions on the Australian credit licence of Wealth WA Pty Ltd (WWA), which provided financial services in the course of the Nicheliving group’s primary business, property development and real estate sales.
The advertisements represented that consumers could obtain an investment property from “just $59 per week”. ASIC was concerned that the advertisements were misleading because they did not disclose the detailed assumptions and qualifications which underpinned a negative gearing investment strategy, requiring the consumer to enter into a mortgage to finance the purchase of the property and to pay an upfront amount of $35,000.
ASIC was also concerned by the accuracy of other historical advertising published by WWA which included headline claims to the effect that its financial services could assist consumers to:
- pay off their mortgages in eight years instead of 30;
- legally reduce their tax to nil; and
- increase their net worth by $100,000 by investing $59 per week.
In response to ASIC’s concerns, APA and WWA have agreed to:
- engage an independent compliance consultant to review their respective advertising policies and procedures; and
- adopt training procedures to ensure their staff are informed of legal requirements in relation to marketing undertaken in connection with financial products or financial services.
The requirement to engage an independent compliance consultant will be included as a condition of WWA’s credit license.
WWA and APA withdrew the advertising after being informed of ASIC’s concerns.