Health insurance provider National Mutual Health Insurance Pty Ltd has revised a television commercial shown in April and early May in Victoria after discussion with the Australian Competition and Consumer Commission. NMHI trades as HBA in Victoria.
The commercial showed a cyclist colliding with a stationary bus after veering to avoid an opening door of a kerbside parked vehicle. It was shown in two formats, one of 30 second duration, promoting hospital cover, and the other of 15 second duration, promoting health insurance.
The ACCC was concerned the use of a traffic scenario was likely to mislead Victorian consumers about the need for private health cover because of comprehensive hospital, medical and other benefits provided through Victoria's Transport Accident Commission's scheme. The scheme covers most traffic accidents.
The benefits under the TAC scheme are available to members of the public involved in a transport accident as defined under Section 3 of the Victorian Transport Accident Act 1996. The TAC scheme is a no-fault compensation scheme and benefits are provided at little or no cost to an eligible claimant. In addition to providing for payment of reasonable hospital, medical and rehabilitation expenses, claimants may be eligible under the TAC scheme to income and disability payments.
While a cyclist in the advertisement would not be covered by the TAC scheme, as he was not struck by a car and did not collide with the opening car door, the ACCC believes the advertisement could mislead consumers about the situation applying to most traffic accidents through the omission of mention of the TAC scheme.
The ACCC acknowledges that upon being approached NMHI acted both responsibly and quickly to remove the commercials from broadcast and to address the ACCC's concerns.
As part of an enforceable undertaking, NMHI will broadcast a revised version of the commercial, which alerts consumers to the operation of the TAC scheme. The new commercial will be broadcast during at least the remainder of June and will target the previous viewing audience.
In addition, the company will provide further detail on the operation of the TAC scheme through its July members' newsletter and a leaflet to be made available to both the public at HBA branches and be issued to new members. The company will also put in place a refund procedure for members who joined HBA after viewing the earlier commercials and who wish to cancel their cover on the basis they were misled.
ACCC Chairman, Professor Allan Fels, welcomed the prompt resolution of the ACCC's concerns and noted that the solution put forward by the company would assist consumers generally in the decisions they need to make in respect of private health cover.
"Health cover is a significant purchase decision for consumers both in terms of cost, level of cover and risk assessment", he said. "It is also an area where consumers currently have a number of pressing issues to consider with the introduction of lifetime rating, the availability of government rebates and taxation considerations.
"As such the ACCC affords such advertising a high priority and will be watching health insurance advertising closely to ensure that consumers are not at risk of being misinformed.
"I am pleased that the action taken by NMHI not only clarifies the past advertising but will also better inform the public as to their options for meeting motor accident injury expenses".
The commercial showed a cyclist colliding with a stationary bus after veering to avoid an opening door of a kerbside parked vehicle. It was shown in two formats, one of 30 second duration, promoting hospital cover, and the other of 15 second duration, promoting health insurance.
The ACCC was concerned the use of a traffic scenario was likely to mislead Victorian consumers about the need for private health cover because of comprehensive hospital, medical and other benefits provided through Victoria's Transport Accident Commission's scheme. The scheme covers most traffic accidents.
The benefits under the TAC scheme are available to members of the public involved in a transport accident as defined under Section 3 of the Victorian Transport Accident Act 1996. The TAC scheme is a no-fault compensation scheme and benefits are provided at little or no cost to an eligible claimant. In addition to providing for payment of reasonable hospital, medical and rehabilitation expenses, claimants may be eligible under the TAC scheme to income and disability payments.
While a cyclist in the advertisement would not be covered by the TAC scheme, as he was not struck by a car and did not collide with the opening car door, the ACCC believes the advertisement could mislead consumers about the situation applying to most traffic accidents through the omission of mention of the TAC scheme.
The ACCC acknowledges that upon being approached NMHI acted both responsibly and quickly to remove the commercials from broadcast and to address the ACCC's concerns.
As part of an enforceable undertaking, NMHI will broadcast a revised version of the commercial, which alerts consumers to the operation of the TAC scheme. The new commercial will be broadcast during at least the remainder of June and will target the previous viewing audience.
In addition, the company will provide further detail on the operation of the TAC scheme through its July members' newsletter and a leaflet to be made available to both the public at HBA branches and be issued to new members. The company will also put in place a refund procedure for members who joined HBA after viewing the earlier commercials and who wish to cancel their cover on the basis they were misled.
ACCC Chairman, Professor Allan Fels, welcomed the prompt resolution of the ACCC's concerns and noted that the solution put forward by the company would assist consumers generally in the decisions they need to make in respect of private health cover.
"Health cover is a significant purchase decision for consumers both in terms of cost, level of cover and risk assessment", he said. "It is also an area where consumers currently have a number of pressing issues to consider with the introduction of lifetime rating, the availability of government rebates and taxation considerations.
"As such the ACCC affords such advertising a high priority and will be watching health insurance advertising closely to ensure that consumers are not at risk of being misinformed.
"I am pleased that the action taken by NMHI not only clarifies the past advertising but will also better inform the public as to their options for meeting motor accident injury expenses".