Source: Money Management: 16 Jan 2012
The Commonwealth Bank of Australia has agreed to change some of its advertised loan comparison rates after concerns were raised by the Australian Securities and Investments Commission (ASIC).
ASIC was concerned that the Commonwealth Bank's advertised comparison rates for its Wealth Package loans were incorrect and potentially misleading because they did not include the Wealth Package $350 annual fee in the advertised comparison rate.
Under the National Credit Code, credit ads that include an annual percentage rate must also include a comparison rate incorporating the fees, charges and interest relating to a loan in order to better reflect the true cost of credit, ASIC stated.
When promoting a package loan, any fee in connection with a loan to qualify for the advertised annual percentage rate must be included in the comparison rate, otherwise that rate will not reflect the loan's true cost, ASIC stated.
"Comparison rates help consumers work out the true cost of credit. It can be difficult for people to compare home loans with different combinations of interest rates and fees," said ASIC Commissioner Peter Kell.
"This is why credit providers must include the comparison rate when they advertise a rate or a weekly payment for a home loan, and ASIC will be active to ensure compliance in this area," he said.
What Is a Debt Consolidation Loan?
Finances Approaching Empty? Watch For These Four Amber Lights
10 Tips - How to reduce your mortgage
The Enjoyable Road to Debt Freedom
Is now the right time to refinance your home?
Good Debt Versus Bad Debt
Tackle Bad Credit With These Simple Ideas!
Knowing 6 types of personal loans will make borrowing easier and save you money
Personal Loans to help Australians in need: FSO
Small business loans to help Aussie businesses through tough times
Police issue warning about bank scam
ANZ nets solid profit despite wealth management
Millions lack access to basic financial services
Reserve Bank leaves interest rates steady
Big banks not too profitable: RBA
Commonwealth Bank changes ads following ASIC concern
Inflation fall strengthens case for rate cuts
Reserve Bank cuts domestic growth outlook