The RAMS group has changed the advertising for its current RAMS Saver account campaign following Australian Securities and Investment Commission concerns that ads promoting the online savings account were potentially misleading or likely to mislead.
The ads featured a prominent headline claim offering a 5.75 percent interest rate, followed with smaller statements that it included a ‘0.8% p.a. Bonus’ and ‘monthly deposit conditions apply’.
The campaign was widely promoted using online, television, and outdoor advertising.
ASIC was concerned that the ads left out important information and failed to give enough prominence to the conditions associated with the 0.8 percent bonus.
Of particular concern to ASIC was that the ads did not disclose that in order to achieve the monthly bonus rate, consumers could not make any withdrawals from the account during the month.
In response to ASIC’s concerns RAMS amended its advertisement and is also taking steps to clarify its product information with customers.
A spokesperson for RAMS told Franchising no customers will be adversely affected from the advertising; the company is writing to all customers concerned who will receive the 5.75 percent p.a. bonus variable rate regardless of the conditions.
“ASIC advised us of some concerns relating to the prominence and completeness of the conditions to qualify for the 5.75 percent variable rate.
“RAMS has worked closely with ASIC to ensure communications about RAMS products are accurate,” the spokesperson said.
ASIC commissioner Peter Kell said that “advertisements should give balanced information to ensure the overall effect creates realistic expectations about a financial product or service”.
Following ASIC’s recent release of Regulatory Guide 234 Advertising financial products and advice services: Good practice guidance (RG 234), Kell reminded promoters of financial services that ASIC will be regularly reviewing ads and will take action when they don’t comply with the law.
“ASIC’s guidance will help industry participants understand their obligations but we are also sending a message that we will take action in response to misleading ads for financial products and services,” Kell said.
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