South Australia (SA) based RAA Insurance Limited has paid $43,200 in penalties after ASIC issued four infringement notices for misleading representations made in television advertisements aired in SA.
The regulator was concerned the television advertisements, which were aired between December 2016 and June 2017, contained misleading representations about the ‘lifetime vehicle replacement’ benefit of RAA’s comprehensive car insurance policy.
ASIC Deputy Chair Peter Kell said, ‘Financial service providers must make sure that the attempt to grab consumer attention in their advertising does not give misleading impressions. Key qualifications to the headline offer must be adequately disclosed.’
ASIC was concerned that the advertisements gave consumers the impression that RAA would replace their car with a new one if the car was a total loss. However, important additional conditions applied in order to qualify for this benefit – the car must have been manufactured after 2014 and must have been insured exclusively with RAA since new.
The advertisements did not, in ASIC’s view, adequately disclose or explain that these additional conditions applied and that the included disclaimer was insufficient to effectively qualify the predominant message of the advertising because:
- the disclaimer was in fine print at the bottom of the advertisement and only displayed for a short period of time; and
- there was distracting audio-visual content in the advertisement while the disclaimer was displayed.
RAA has ceased airing the television advertisements.