One Big Switch’s 2014 home insurance campaign saw more than 74,000 consumers signed up, however the company did not hold an Australian financial services (AFS) licence. Following ASIC concerns, the company applied for an AFS licence.
In granting the licence, ASIC imposed a condition requiring the company to appoint an independent consultant to review its compliance with financial services laws, and rectify any deficiencies identified by the expert. Law firm Kemp Strang Lawyers was appointed as the consultant.
Kemp Strang Lawyers has delivered an initial report to ASIC which identified that One Big Switch’s advertising of its recent insurance campaigns contained potentially false and misleading statements. For example,
- advertising a ‘price beat guarantee’ without prominent and proximate qualifications to the offer, such as a minimum age requirement, and the need to be switching from a comparable policy.
- advertising an ‘average 30% saving on life insurance’, when the pricing of this product depend very much on the health and lifestyle of the individual applicant.
- advertising car insurance with an email titled ‘Could you save $600, and lock it in for 2 years?’ when that saving was not necessarily representative of the savings that could generally be achieved.
One Big Switch has agreed to improve its compliance with ASIC’s guidance on advertising, including ensuring ads do not contain misleading statements, and any claims made are appropriately qualified.
Kemp Strang Lawyers will undertake a further review of One Big Switch and report to ASIC by the end of September 2015.
ASIC Deputy Chairman Peter Kell said, ‘In a time when household budgets are tight, offers of group discounts can be attractive to consumers.
‘ASIC wants to ensure those making the claims are appropriately licensed and complying with important consumer safeguards. ASIC will not tolerate promoters’ failure to comply with the law.’