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RAA pays penalties for misleading advertising

Wednesday 4 April 2018

RAA Insurance Limited must pay $43,3200 in penalties, after receiving four infringement notices for misleading marketing in South Australia.

“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,” said ASIC Deputy Chair, Peter Kell.

Insurance is one of the key areas in financial services being addressed in the royal commission. There has also been consideration in stretching the Banking Executive Accountability Regime (BEAR) beyond banks and their subsidiaries to include the insurance industry.

According to an official statement from ASIC, the regulator was concerned about RAA’s television advertising, aired between December 2016 and June 2017, that promoted a ‘life-time’ vehicle replacement policy.

While the advertisement did include a disclaimer, ASIC believes it was overshadowed by the predominant message in the initial advertisement.
ASIC indicated that:

  • 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.