KEY POINTS:
Hanover Finance this week lost its appeal over television ads found to be misleading about its strength.
The business, owned by Eric Watson and Mark Hotchin, tried to have a decision about its ads overturned.
But the Advertising Standards Complaints Board upheld an industry ruling and rejected Hanover's
plea.
An eight-second ad voiced by former news presenter Richard Long said Hanover could withstand "any conditions", a reference to its financial security in the current economic environment.
Complainant and financial adviser D. Percy said the ad was "grossly misleading" because Hanover's credit rating from Fitch is BB+, a non-investment grade rating which Fitch says indicates there is a possibility of a credit risk developing in adverse economic conditions.
The complainant said the ad tried to portray a sense of security, both visually and with the voiceover.
"Given the recent developments in this sector of more companies continuing to fail ... I believe it grossly misleading that Hanover's ad should mention it can handle 'any conditions' when its independent credit rating clearly is of a different view and the entire sector is operating in adverse economic conditions."
The Advertising Standards Authority upheld the complaint but Hanover appealed, saying Hanover Group felt strongly the voiceover with the words "Hanover, a New Zealand business with the size and strength to withstand any conditions", was accurate.
The voiceover was supportive of the group only and not any particular member of the group, Hanover said.
Also, Hanover Finance was strong and also capably managed by experienced people so that it "can withstand any conditions" and that Hanover Group had more than $1 billion of assets so it must be true, it said. The complainant said size of assets was only one measure of an organisation's financial wellbeing.
Hanover said everything was covered off by the businesses' processes and investment statements for each of the entities within the group.
The board said Hanover was a well-recognised brand name and Mr Long, a former TV One newsreader, "gave a further level of trust and recognition to the brand image". However, the ad "did not observe the high standard of social responsibility required by a financial advertisement".
* The ad
Visuals: Wind-blown clouds, finishing with Hanover's logo and website.
Voiceover: By Richard Long, "This weather update is brought to you by Hanover, the New Zealand business with the size and strength to withstand any conditions."
Timing: Ad ran on TV One from August to November last year.
