The $50,400 in fines cover four infringement notices issued by ASIC, which raised concerns about the company’s “2K on your way” advertising campaign.
ASIC contested that the ads for its “HomeSolution” house falsely created the impression that any buyer eligible for the First Home Owner Grant could purchase one of its house and land packages with a $2,000 deposit.
In reality, Metricon required customers to fund the full 5 per cent deposit – equating to as much as $41,000 on an $825,000 house and land package – usually through an unsecured personal loan arranged by one of its mortgage brokers.
The regulator said that any disclaimers used to highlight these terms and conditions were not sufficiently prominent in the advertisements and that these disclaimers were featured in small font at the bottom of a web page on eligibility which would-be buyers had to navigate to in order to find.
The ads appeared in various mediums, including radio, print, online and outdoor, across three states between July 2017 and February this year.
ASIC noted that Metricon has since removed the ads and stopped promoting the offer.
Metricon ‘regrets’ actions
Following the announcement, Metricon CEO Mario Biasin issued a statement in which he expressed regret that the company’s advertising may “have been interpreted as misleading”.
But it pointed out that its payment of the infringement notices does not mean it has admitted to breaching the law.
“Metricon paid the infringement notices which is not an admission of liability and is not regarded by ASIC as a finding of guilt,” the company said.
Metricon declined to comment further.
Infringement notices called out
ASIC itself notes that the issuing and payment of an infringement notice does not equate to an admission of guilt. They are issued where the regulator “has reasonable grounds to believe” that consumer protection laws have been broken.
This point was criticised by the banking royal commission’s head, Kenneth Hayne, who used his interim report last week to criticise ASIC’s perceived overuse of negotiation and infringement notices in relation to misconduct, rather than actual enforcement.
“ASIC has issued infringement notices. But by paying the infringement notice, the entity makes no admission. It is not taken to have engaged in the relevant contravention,” Commissioner Hayne said.
“Yet, ASIC and the Commonwealth are prevented from starting a civil or criminal proceeding in relation to the contravention that caused ASIC to issue the infringement notice.
“Rarely has ASIC gone to court to have the defaulting party penalised. The criminal prosecutions that have been brought have all been directed at individuals. Civil penalty proceedings have seldom been brought.”