ASIC issued three infringement notices totalling $30,600 to O.C.M. Online Capital Markets Pty Ltd (OCM) for false or misleading online advertising.
OCM is an Australian financial services licensee who provides an online margin foreign exchange trading platform and products. OCM created some advertisements and e-mails regarding its margin foreign exchange trading platform. OCM’s advertisements and emails made several claims about the advantages of using its financial service including, “$2,533 in Just 7 Days!” and “Learn how you can increase your monthly income”.
ASIC’s View – False or Misleading Online Advertising
ASIC is focussing on licensee compliance in the retail Over the Counter (OTC) derivative sector. ASIC believed the advertisements and emails were misleading because:
- They created the impression customers could rely on OCM to provide quick, substantial profits and consistently increase their monthly income;
- They failed to convey the high risks associated with trading in margin foreign exchange derivatives and contracts. Such trading provides volatile returns and does not guarantee consistent profits; and
- References to the risks and disclaimers were in fine print and were ineffective to correct primary messages created by the headline claims.
ASIC’s Commissioner, Greg Tanzer, addressed the matter in ASIC’s media release saying that businesses shouldn’t mislead consumers through false claims about the level or consistency of returns achievable from such trading.
Key Takeaways for Australian Businesses
Australia’s Consumer Law prohibits misleading or deceptive conduct. It is a general protection for consumers. Companies using advertising, marketing materials and other correspondence should be especially mindful in considering the information’s accuracy and impact. Your business should ask, how can consumers interpret these statements? It is important to avoid misleading or deceptive statements to maintain good relationships with your customers, and with the Australian Competition and Consumer Commission.
Takeaways for Australian Financial Services Businesses
Financial Service Businesses face additional regulations such as, not making false or misleading statements likely to induce a customer into applying for financial products. Here, OCM should have known that in making their statement, it induced potential customers to purchase their services under a mistaken belief that there were guaranteed returns.
How Should Australian Businesses Advertise Their Business?
Businesses should consider how consumers could interpret their advertising statements, emails and other communications and take care to ensure their accuracy.
LegalVision’s consumer and competition lawyers can help you develop your advertising and marketing material and assist you in complying with the regulations on misleading or deceptive conduct.
A specialist consumer lawyer will not only consider the words you are planning to use but, will refer to case law on how the courts have ruled on that wording is generally used in your industry.
LegalVision’s experienced consumer and competition lawyers can assist you in ensuring your marketing and advertising material is compliant.
Questions? Get in touch on 1300 544 755.