Pitfalls of group buying advertising for health practitioners

Health practitioners across a variety of registered health professions, such as dental practitioners, have been approached to participate in online marketing campaigns by group buying websites. Group buying is an ‘impulse buying’ phenomenon where products or services are offered for a strictly limited time at reduced prices. The deal is activated when a minimum number of people (which is pre-determined by the supplier) agree to purchase the deal, which is usually in the form of a voucher or a coupon. There are a number of group buying websites operating in Australia.

In the cases we’ve seen, a campaign organiser usually contacts health practitioners from different locations in order to cover a wide geographical area as part of a nationwide campaign. Customers can purchase a voucher from the website and then redeem it at the participating practice that most suits them geographically.

While these campaigns may initially seem a good opportunity for cost-effective marketing and client base expansion, we consider there are serious issues with these forms of advertising for regulated health practitioners. It has been particularly concerning to note that practitioners may not even have a chance to vet the content of the advertising before it goes live.

This article is a timely reminder to practitioners to ensure that their advertising conforms to the National Law  requirements (enacted across all States and Territories in Australia) and applicable guidelines, especially in connection with ‘group buying’ advertising campaigns.

If in doubt, simply don’t participate. Pitfalls tend to include the use of standard terms and conditions (which may be appropriate for discount hot-air-balloon rides or a romantic getaway) and the use of inducements and gifts.

We’ve seen examples of advertising campaigns offering free teeth whitening as part of a treatment package, and incremental discounts on treatment where multiple treatments are purchased at once. For example, buy one porcelain fused to metal crown for $750, two porcelain-fused to metal crowns for $1,400, or three porcelain fused to metal crowns for $1,800.

Advertising must always conform to the relevant consumer protection legislation, which includes the Competition and Consumer Act 2010 (Cth) and the relevant State-based goods and fair trading Acts. Advertising must not be misleading or deceptive or likely to mislead or deceive, or contain false representations.

Section 133 of the National Law sets out advertising rules for all regulated health practitioners as follows:

133 Advertising

(1) A person must not advertise a regulated health service, or a business that provides a regulated health service, in a way that—

(a) is false, misleading or deceptive or is likely to be misleading or deceptive; or

(b) offers a gift, discount or other inducement to attract a person to use the service or the business, unless the advertisement also states the terms and conditions of the offer; or

(c) uses testimonials or purported testimonials about the service or business; or

(d) creates an unreasonable expectation of beneficial treatment; or

(e) directly or indirectly encourages the indiscriminate or unnecessary use of regulated health services.

 

Some of the issues in group buying advertising for dental services may include:

  • inducements such as free in chair/take home teeth whitening with the purchase of a coupon for a specific treatment;
  • inclusion of testimonials by the campaign organiser/website (which is not permitted in relation to advertising of a health service);
  • universal terms and conditions (i.e. voucher must be used in full at one visit);
  • the ability to purchase additional coupons as gifts for friends;
  • offers for multiple/bulk treatment discounts;
  • time-sensitive offers.

 

The Dental Board of Australia has published advertising Guidelines which can be found at http://www.dentalboard.gov.au/Codes-Guidelines/Policies-Codes-Guidelines.aspx

The Guidelines should be consulted in relation to any proposed advertising campaign. A draft copy of any advertisement should always be vetted before it’s published. Practitioners are responsible for any advertising associated with the provision of their service. That responsibility cannot be delegated.

The Guidelines identify the following phrases as potentially problematic:
– ‘don’t delay’,
– ‘achieve the look you want’ and
– ‘looking better and feeling more confident’.

These phrases are problematic because they may tend to create unrealistic expectations as to the effectiveness of treatment and may encourage the unnecessary or indiscriminate use of a regulated health service. Practitioners should also be mindful to avoid language which might create fear or distress in the reader. Avoid phrases such as ‘act now before it’s too late’.

Finally, these provisions don’t just apply to health practitioners, but to ‘any person who advertises a regulated health service’. The Australian Health Practitioner Regulation Agency states in its Frequently Asked Questions: Advertising (March 2013):

  1. Who must adhere to the requirements of advertising a regulated health service under the National Law?
    The advertising provisions of the National Law apply to any person who advertises a regulated health service, including registered health practitioners, non-registered health practitioners, individuals and bodies corporate.

 

Health practitioners should ensure that advertising made on their or their practice’s behalf is compliant with the National Law. Contravention of the National Law is an offence, carrying penalties of up to $5,000 for individuals and $10,000 for a body corporate. Health practitioners may also be subject to disciplinary action if non-compliant.

It’s also worth noting that the Australian Competition and Consumer Commission (ACCC) has a webpage dedicated to advising consumers on the pitfalls associated with group advertising. And it has been widely reported in the Australian media that the ACCC has pursued federal court proceedings against group buying websites for alleged misleading and deceptive practices towards consumers.

Contact Kellie Dell’Oro or Tamir Katz for more information. Download this article.

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