Financial services providers need to take care to ensure that their advertising does not mislead consumers and that any qualification to a headline offer must be adequately disclosed in the advertisement.
On 23 March 2018 RAA Insurance Pty Limited (RAA) paid $43,200 in penalties after ASIC issued four infringement notices to it for misleading representations made in television advertisements aired between December 2016 and June 2017 in South Australia.
ASIC found that the advertisements contained misleading representations about the ‘lifetime vehicle replacement’ benefit of RAA’s comprehensive car insurance policies. ASIC said that the advertisements gave consumers the impression that RAA would replace their car with a new one if the car was a total loss. ASIC determined that RAA’s advertisements did not adequately explain that additional conditions applied, namely, that in order to qualify for this benefit, the car must have been:
- manufactured after 2014; and
- insured exclusively with RAA since new.
Whilst the advertisements included a disclaimer, ASIC was concerned that:
- the disclaimer was in fine print at the bottom of the advertisement and only displayed for a short period of time; and
- there was distracting audio-visual content while the disclaimer was displayed.