ANZ Case Sends Warning To Advertisers

Media release: 21 September, 2002

ANZ Case Sends Warning To Advertisers

An expensive reminder about Fair Trading Act requirements for accuracy in financial advertising has issued from the Commerce Commission, according to advertising law specialist John Swan of Wellington law firm Gilbert Swan.

“The ANZ Bank’s misleading MasterCard offer is the case in point. While the Commerce Commission acknowledged that the bank’s breach was not necessarily wilful, it also wanted to signal to businesses that claiming an honest mistake won’t wash as a defence, and commented about ‘a clear lack of quality control in terms of compliance with the Fair Trading Act’.”

The Commerce Commission prosecuted the ANZ Bank for breaching the Fair Trading Act in relation to a promotion offering nearly 10,000 of its existing customers an ANZ MasterCard with a pre-approved $5000 limit. However, ANZ’s method for identifying eligible customers was faulty, and 850 of the original 9,998 customers targeted did not meet minimum criteria based on their income level.

The Bank was subsequently fined $7,500 plus $1,130 costs in the Wellington District Court last week, (September 18), and wrote off $2.3 million in campaign costs.

“Now I’ve no doubt that the Bank had its procedures, and that’s there’s been a lot of anguish about why they weren’t adequate, and where responsibility lies,” Mr. Swan says.

“However, even where there are disciplines in place, parties under pressure often fail to follow them, and both marketing departments and agencies find it hard to take a dispassionate view of their ads.

“The most sensible precaution is for advertisers to take legal advice independent of the production process as the penultimate step before the ads are finally and irrevocably released. The cost of that advice is trivial compared with the potential costs of a mistake.

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“The Fair Trading Act is designed to ensure that the consumer is protected. The Commerce Commission is determined to ensure that that protection is available. Typically, it does so by turning its attention and focusing tightly on particular industry segments or advertising practices it is concerned about. Financial advertising, as this case shows, demands a high degree of clarity and certainty about eligibility for offers. However, I think we’re seeing a general expectation of a higher level of compliance, and it’s a safe bet we’ll see more prosecutions.

“Advertising agencies and their clients that wish to stay out of trouble need to have robust compliance procedures in place and to follow them. They should also engage an independent third party qualified to provide a legal review of advertising, before it goes to placement.”

Ends

More information: John Swan, partner, Gilbert Swan Barristers and Solicitors, phone 025 494 858.

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