NIB Fined For Misleading Health Insurance Advertising
Friday 8 May 2015 @ 9.07 a.m. | Trade & Commerce
NIB Health Funds Ltd (NIB) has paid a penalty of $10,200 following the issue of an Infringement Notice by the Australian Competition and Consumer Commission (ACCC) in relation to advertising about the waiver of the waiting period for “Extras” cover.
Background
The penalty comes after the ACCC announced a crackdown on businesses in the private health insurance sector, along with debt collection and health services companies, as part of its 2015 Compliance and Enforcement Policy.
The policy document, released in March 2015, also warned that truth in advertising is a key focus of the agency’s enforcement efforts during 2015.
From December 2012 to November 2014, in promoting its combined Hospital and Extras cover, NIB offered to waive the waiting period on its Extras option which it represented as “usually” or “normally” requiring a 2 month wait.
Reason for the Infringement Notice
The Infringement Notice was issued to NIB because the ACCC had reasonable grounds to believe that NIB had contravened the Australian Consumer Law (ACL) [Sch 2 to the Competition and Consumer Act 2010 (Cth)] by making a false or misleading representation that it usually or normally required a 2 month waiting period for the Extras option, when in fact NIB had made this benefit available to all customers immediately for 23 months from December 2012.
Reaction from the ACCC
The Commissioner of the ACCC, Sarah Court said:
“Consumers should be able to make informed purchasing decisions. Claims that benefits are only available if a product or service is purchased by a specified date must be true and not mislead consumers … Businesses which extend an offer for a considerable time beyond its original expiry date should ensure that representations made in connection with the offer do not become misleading to consumers as a result.”
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.
ACCC Gives Warning to Businesses
The ACCC warns businesses to give consumers current information, use simple language, check that the overall impression is accurate, back up claims with documented evidence, note important limitations, correct any misunderstandings and be prepared to substantiate claims.
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Sources:
ACCC acts on NIB health insurance advertising – ACCC Release MR 76/15
NIB coughs up $10,200 over insurance ads as ACCC crackdown continues – Article from smartcompany.com.au
