Finance company Marac has had one of its advertisements labelled as "likely to mislead" and "exploit" potential investors by the national advertising authority.
The Advertising Standards Authority has upheld in part a complaint against one of Marac's ads.
The contentious advertisement mentioned Marac's Standard & Poor's investment grade
credit rating with the catch phrase: "the only rate you should be looking for".
Marac is one of New Zealand's few finance companies who have attained the independent rating, a BBB-, which puts them in the "investment" category, one rating above the "speculative" category.
The complaint by S. Hood complained that the catch phrase implied that the BBB- rating made Marac a secure investment but that given its marginal status in the investment category, the advertisement was misleading.
Lawyers for Marac labelled the complaint as "frivolous and utterly without foundation".
Marac's lawyers said that using the Standard and Poor's rating was "far from misleading" and provided accurate and independent information.
They said that the advertisement, that appeared on Marac's website, was surrounded by other material which provided potential investors with more information.
The authority reviewed the complaint under the Code for Financial Advertising which includes the principles of observing a high standard of social responsibility and requires advertisers to "observe the basic tenets of truth".
The majority of the board decided that the advertisement "contained a level of hyperbole and exaggeration" and that it was "likely to mislead and exploit the lack of knowledge of consumers".
Marac is owned by Pyne Gould Corporation.
See the full judgement here
