Most Aussies find bank advertisements confusing and misleading
Article by Rebeccah Elley
The majority of Aussie consumers believe bank advertisements are confusing, actively misleading and even indecipherable as very few people know how to correctly interpret the advertisement’s financial content, new research by People’s Choice Credit Union showed.
The study was conducted by the Ehrenberg-Bass Marketing Institute with 1520 people surveyed. A steep 70.4% of participants rated bank ads as ‘confusing’ and 64.7% thought they were ‘misleading’. In contrast, a low 33.1% thought bank ads were ‘honest’ and a mere 26.4% said they were ‘clear’.
The results were similar across the board and did not vary significantly whether respondents spoke English as a first language or not.
The survey participant's ‘confusion’ was reiterated when they were asked to compare home loan advertisements and select which offered the best deal, with only 12.6% of respondents correctly selecting the best deal in each of the scenarios.
People’s Choice managing director Peter Evers said regulation is meant to protect consumers, but right now it’s letting them down. “The financial regulators have laid down the rules which say we have to advertise this way, but it’s not delivering, it’s not giving people what they need, so we have to think again.”
Evers advised change is needed to ensure advertising is clear for two vital reasons: so consumers can understand what’s the best deal, and so lenders will be under more pressure to provide it.
“If you don’t get the best mortgage deal, it’s going to cost you thousands and thousands of dollars. How can people get the best deal? How can competition between financial institutions be effective if people don’t understand what’s on offer?
With so much 'confusion' when it comes to the advertisement of bank deals, it’s important to take finances into your own hands and search the financial market for the best deals using Mozo’s comparison tools from home loans to credit cards to clearly see what's on offer at the moment.
“When barely one in ten ordinary Australians can correctly understand the core information that’s contained in every home loan advert, then something is clearly wrong,” Evers said.
“We need a banking system where consumers are informed and confident and don’t have to wade through the fine print to determine the best deal.”
The survey results come as the Federal Government’s Financial System Inquiry (FSI) considers changes to better position and broadly improve Australia’s financial system.
For the mean time, use Mozo's online financial calculators to see how much you could save by switching today.