Two of Australia's banks have been forced to change their advertising after it was found "inappropriate" and "potentially misleading".
Commonwealth Bank and HSBC Australia have been using ads for complex financial products, designed for unsophisticated retail investors, which create the impression those products are simpler and less risky than they are. The Australian Securities and Investments Commission said it "raised concerns" about the ads, which forced the banks to change their practices.
The Commonwealth Bank was promoting its "protected loan" product (an interest-only product that allows customers to borrow money to buy shares in two payments) by comparing it to someone who invests in shares with money that hasn't been borrowed.
The ads said protected loan customers could "walk away with no loss" at maturity if the price of their shares fell, but ASIC said that was "potentially misleading" because the costs of the loan and protection not been considered. With HSBC Australia, the promotion of some structured financial products on its website created the impression some of the investments were low-risk, and comparable to relatively safe investments such as bank deposits, when that "was not the case".