Offer's wizardry in Chinese fineprint

A finance company promoting itself as Wizard Home Loans to Auckland's Chinese and Korean communities has admitted that its advertising breached the Fair Trading Act.

New Aussie Finance is reviewing its procedures following a Commerce Commission investigation into ads it placed in Auckland Chinese language publication Property Overview in February.

The ads for Wizard Home Loans stated (translated from Chinese) "floating rate 3.22 per cent p.a.* from" and "no application fee", "no monthly fee", and "no annual fee".

But the commission found that the 3.22 per cent annual interest rate was available for only the first month of the loan, that the offer was only on loans of $300,000 or more and that the loans were subject to a $600 application fee.

Also, pictures and contact details of 14 employees featured in the ads implied they were Auckland-based, when in fact 12 were based in Australia.

Although the advertising included the disclaimer "terms and conditions apply" the offer was misleading, commission fair trading director Deborah Battell said.

"All important terms and conditions should match the offer and must be clearly and accurately disclosed.

"Small print cannot be used to substantially change or qualify the impression given by advertising," she said.

Wizard has 14 branches in New Zealand and over 175 in Australia.

New Zealand head John Grant said last night that the company was reviewing procedures to ensure they met commission compliance guidelines.