The Federal Court of Australia has made declarations and ordered Superannuation Warehouse Australia to pay a penalty of $25,000 for false and misleading “Free SMSF Setup” advertising.
SWA, which provides online accounting and administration services for self-managed superannuation funds (SMSF), admitted that the statements were false and misleading. It consented to the declarations and additional orders requiring SWA to:
The Federal Court found that between 22 January 2014 and 8 May 2015, the “Free SMSF Setup” statement on the websites was false, misleading and deceptive because it represented that SWA would set up an SMSF at no cost when in fact:
These matters were not clearly or prominently disclosed on the websites.
In addition, between 22 January 2014 and 5 August 2014 applications for SMSF set up with a corporate trustee required a payment of $950 to be made to SWA, without this being clearly and as prominently stated on the websites where “Free SMSF Setup” was advertised.
In the judgment, His Honour Justice Beach found that the “Free SMSF Setup” representation was false or misleading in that:
In the circumstances the setup was not ‘free’.”
ASIC Deputy Chair Peter Kell welcomed the decision and said: ‘Deciding to establish a self-managed superannuation fund is a significant financial decision. Consumers should not be misled by advertising, including online.
ASIC considers that terms such as “free” convey a strong impression to consumers and should not be used where there is any charge or cost associated with the product or service advertised.’
On 10 April 2014, ASIC issued an infringement notice to SWA in respect of the “Free SMSF Setup” advertisement on one of the websites. SWA failed to pay the penalty of $10,200 specified in the infringement notice.
Following SWA’s failure to pay the infringement notice, ASIC conducted further investigations and subsequently, on 28 April 2015, ASIC issued a civil penalty proceeding in the Federal Court of Australia.