Instant Finance dodges a bullet
Instant Finance has managed to overturn an unfavourable decision made against the company’s advertising, which if upheld and published could have damaged its reputation.
Wednesday, June 13th 2007, 7:25AM
The complainant, J Hasler, said that Instant Finance was registered as a company in 2001 and that it appeared not to have been in existence for 35 years.
"If it has been in existence for 35 years has it been trusted for 35 years. How should "Trust" be defined in this instance especially relative to investments,” Hasler said.
Hasler also questions whether Instant Finance can call its B3 Risk Analysis rating investment grade.
Instant Finance was “extremely concerned” that the complaint had been made and said it was “offended by some of the comments made by the complainant that in effect, question our integrity.”
“As a company we strive to achieve high standards in all aspects of our business and in terms of transparency and disclosure to potential investors we believe we are achieving best practice standards.”
The Advertising Standards Board upheld the complaint and took the view that “the word ‘trusted’ was a very loaded word to use in relation to the type of investment offered, particularly in the current financial environment.”
It went on to say that the advertisement “neither met the high threshold of social responsibility, nor did it ‘strictly’ observe the tenets of truth and clarity, required in financial advertising where there was no room for ‘puffery’ or hyperbole.”
Instant Finance then sought to appeal the decision but also to suppress publication of the original decision until an appeal had been heard.
“Due to the highly sensitive nature of this decision in the current climate for finance company investments, I believe that this decision should be suspended. To publish the decision could have a serious adverse effect on Instant Finance's business, since the public could interpret the decision as stating that Instant Finance is not to be trusted,” Instant Finance’s lawyer argued.
The board agreed saying that in “this particular instance the publication of the decision prior to the Appeal could result in disproportionate harm to the advertiser.”
Instant Finance, in its appeal argued a number of points including that the word trust is widely used by financial services organisations, and showed that the company had been around for 35 years and still had its original shareholders.
It also argued that “there is nothing intrinsically wrong with an issuer asking people to place trust in them nor in claiming that for a long number of years, people have done just that.”
“Instant Finance is very proud of its position as a long standing participant in the higher risk end of the lending market.”
It also said that the Securities Commission had looked at its advertising and found nothing wrong with it. Instant Finance also suggested the complainant. J Hasler, may be a competitor.
“Instant Finance also questions the validity of the complaint, made by a complainant with obvious industry knowledge but without a proper identifying address. This complainant has gone to great lengths to analyse Instant Finance's position but overlooks many other instances of the word "trust" and many other advertisements which, while not using this word, imply that the investment is desirable due to similar emotive reasons. Instant Finance queries whether this is a bona fide complaint.”
The Appeal Board ended up overturning the original decision acknowledging the ad in question appeared in a metropolitan newspaper with many similar ads ”and the reader would be likely to be familiar with the content of such advertisements, especially if they were seeking options for invest options.”
It also noted that because an investors has to read the investment statement and sign it, “a prospective client would be thoroughly informed about the nature of the product, prior to committing to invest.”
It also went on to say that Instant Finance had a good track record; “There was no evidence that it had mislead consumers, and the business had been conducted in a manner which met the requisite high standard of social responsibility for such products.”
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