AAMI Penalised for Misleading Car Insurance Advertising
ASIC has issued two infringement notices ($10,200 each) for false or misleading advertisements promoting AAMI car insurance. This is an example of why extreme care needs to be taken in utilizing any form of comparative advertising and the reality that qualifiers (especially where there is a savings from switching type representation) are usually unlikely to be seen as sufficient to qualify the dominant message.
According to ASIC, the television and online advertisements contained a headline claim ‘AAMI FLEXI-PREMIUMS COULD SAVE YOU AN AVERAGE OF $357 OFF YOUR NEW POLICY’ and a verbal representation stating ‘Switch your car insurance and AAMI Flexi- Premiums could save you an average of $357 off your new policy.’
ASIC’s concern was that the representations were false or misleading because they:
- were likely to give the impression that savings could be achieved by consumers if they switched their car insurance from their current insurer to AAMI. In fact, the specified savings were based on a comparison between different AAMI premiums with different levels of excess chosen, rather than between a competitor’s product and AAMI’s product.
- did not adequately convey that AAMI customers would need to choose the maximum level of excess in preference to the minimum level of excess to achieve the specified dollar savings. Based on AAMI’s analysis of a sample of their own customers, AAMI was aware that most customers did not choose the maximum excess.
ASIC stated that although AAMI included fine print within the advertisements to explain how the savings could be achieved, ASIC considered these to be ineffective having regard to the relative size of font, density of text, and compelling visual and other messages
For more details see AAMI Pays $20,400 penalty for misleading car insurance advertising
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