The Australian Competition and Consumer Commission has instituted proceedings against Medibank Private Limited in the Federal Court, Melbourne, alleging false, misleading and deceptive advertising of its health insurance products.
In one advertising campaign, the ACCC alleges Medibank Private advertised 'no rate increase in 2000' in relation to its Package Plus insurance products when the rates for those products increased on 1 July 2000. The ACCC further alleges that Medibank Private's call centre staff made representations to consumers that the rates for its Package Plus products would not increase until next year.
In a second campaign, the ACCC alleges that Medibank Private's advertised an offer to consumers who switched from another fund to Medibank Private of 'any waiting periods waived' and 'get 30 days free if you change to Medibank Private' in newspaper advertisements in August 2000 but:
- failed to disclose, or adequately disclose, that only the 2-month general waiting period and the 6-month optical waiting period were waived; and
- failed to disclose, or adequately disclose, that conditions applied to the offer of 30 days free health insurance.
The ACCC is seeking court orders including:
- declarations that Medibank Private has breached the relevant provisions of the Australian Securities and Investments Commission Act 1989*;
- injunctions restraining Medibank Private from advertising in the same way in the future;
- orders requiring Medibank Private to waive all waiting periods for those consumers who switched from another fund and purchased private health insurance from Medibank Private during and following the second advertising campaign;
- orders requiring Medibank Private to offer 30 days free health insurance to those consumers who switched from another fund and purchased private health insurance from Medibank Private during and following the August advertising campaign;
- orders requiring Medibank Private to provide refund or credit to consumers who purchased a Package Plus health insurance product on or before 30 June 2000 for the difference between the pre – 1 July 2000 premium or rate and the post 1 July 2000 premium or rate for the period 1 July 2000 to 31 December 2000;
- orders that Medibank Private publish corrective advertising on television and in national daily newspapers;
- an order requiring Medibank Private to review of its compliance program; and
- costs.
A directions hearing has been set for 10.15 a.m. on 4 December 2000 in the Federal Court, Melbourne.