The Australian Competition and Consumer Commission has instituted proceedings against NRMA Health Pty Limited, SGIC Insurance Limited, SGIO Limited and Saatchi & Saatchi Australia Pty Ltd in the Federal Court, Sydney, alleging misleading and deceptive advertising of its health insurance products.
The ACCC alleges NRMA, SGIC and SGIO in print advertisements that depicted a woman nursing a new born baby, made representations guaranteeing "free delivery" "no matter how advanced your pregnancy is" in an endeavour to entice consumers to transfer or join their health insurance funds. The advertisements contained two fine-print disclaimers that provided that a consumer receives full health insurance coverage for obstetric service only after the payment of any excess or co-payment, and consumers must serve the 12 month waiting period either with NRMA, SGIC, SGIO or their existing fund before benefits are payable for obstetric and pregnancy related services.
The ACCC alleges that the disclaimers were inadequate and unlikely to come to the attention of consumers.
The ACCC is seeking court orders including:
- declarations that NRMA, SGIC and SGIO contravened the relevant provisions of the Australian Securities and Investment Commission Act 1989*;
- publication of corrective advertisements in the newspapers in which the original advertisements appeared;
- waiver of the 12 month waiting period for pregnancy related services for women or families who transferred or joined NRMA, SGIC or SGIO from 1 July 2001 to 30 August 2001;
- undertakings not to make similar misrepresentations in the future; and
- an order requiring NRMA, SGIC, and SGIO to review their compliance programs.
The ACCC is also seeking an order preventing Saatchi and Saatchi from engaging in misleading and deceptive conduct and an order requiring Saatchi's implement a trade practices compliance program.
A directions hearing has been set down for 30 November 2001.