Woolworths has agreed to change an ad campaign for its car insurance product following ASIC concerns it was potentially misleading.
The ads for Woolworths car insurance claimed “on average, our customers saved $240”.
The claim was based on a sample of 109 customers who purchased a comprehensive car insurance policy from Woolworths between 6 August 2012 and 30 September 2012, and compared the cost of the new Woolworths premium with the premium they had paid for their previous policy.
ASIC was concerned that the comparison was made despite potential differences between Woolworths’ insurance product and the product consumers switched from.
The regulator said the range prospective customers could choose from when determining the agreed value of their vehicle was lower than the range offered by some other insurers, meaning that customers could be insured under their new policy with Woolworths for a lower agreed value.
ASIC identified that these differences in the agreed value of vehicles had the potential to impact on represented savings.
While the ads included a disclaimer that stated the cover and benefits may differ between the policies being compared, ASIC believed the disclaimer was not sufficiently prominent to effectively qualify the savings claim. This was particularly the case for ads that appeared on buses where consumers had less time to scrutinise the ad.
ASIC added that the disclaimer was unlikely to correct any misleading impressions created by viewing the savings claim.
“The more that a qualification is required to balance the information contained in the headline claim, the clearer and more prominently placed the qualification should be,’ he added.
The ads ran in the latter half of last year and early this year, appearing online, in outdoor marketing and on buses.
Woolworths was unavailable for comment as this story went to press.
Stay tuned to Insurance Business tomorrow, when we’ll be asking whether ‘supermarket insurance’ is a good or bad thing for the industry and consumers.