ASIC acts against Mortgage Choice
Home loan broker Mortgage Choice has been forced to withdraw claims that it is unbiased in its loan recommendations to borrowers. The Australian Securities and Investments Commission has accepted an enforceable undertaking from one of the nation's largest mortgage broker not to make claims of unbiased home loan advice or that it is paid regardless of which loan is recommended to borrowers. ASIC says such claims in Mortgage Choice's advertising and in its customer charter were misleading and deceptive given that the broker only recommends loan for which the lender agrees to pay a commission. The broker must also compensate borrowers – up to 50,000 since October 2002 – who have lost out after relying on these claims in their loan choice. The case shows the need for greater clarity about the extent to which brokers are tied to lenders, ASIC's executive director of consumer protection, Greg Tanzer said.
Infochoice general manager Denis Orrock said borrowers should be wary of the independence of loan recommendations of all brokers in the market and that the concerns raised by ASIC in this case are not confined to one broker alone.
Read Infochoice's guide : The 12 things you must know before using a mortgage broker