ASIC has released Consultation Paper 178 Advertising credit products and credit services: Additional good practice guidance (CP 178) to promote good practice and help industry comply with their legal obligations to not make false or misleading statements or engage in misleading or deceptive conduct when advertising credit products and services.

CP 178 relates specifically to credit facilities and proposes amendments to Regulatory Guide 234 Advertising financial products and advice services: Good practice guidance (RG 234) which was released earlier this year and applies to all types of financial products.

The additional good practice guidance focusses on concerns ASIC has identified in advertisements for a wide range of credit products and services, including:
(a) lending to consumers for personal, domestic or household purposes or for residential investment (this includes secured or unsecured loans, credit cards, payday lending, micro loans and reverse mortgages);
(b) small business lending;
(c) consumer leases;
(d) sale of goods by instalments and rent-to-buy arrangements; and
(e) assisting a consumer in relation to a credit product, including advertisements by mortgage or finance brokers and retailers advertising the availability of credit at point-of-sale.

The proposed additional guidance and examples cover these areas: providing a balanced message about the product or service; advertising of interest rates and comparison rates; the use of certain terms and phrases; advertising that implies product suitability; and advertising about the nature and scope of credit assistance.

The proposals do not deal with specific obligations required under the National Credit Act in relation to credit disclosure documents or specific requirements for credit advertisements (e.g. the information relating to interest rates and comparison rates that must be included in advertisements in certain circumstances).

Comments on the consultation paper and draft regulatory guide are due by 6 August 2012.