Woolworths to change insurance ads

Woolworths Limited 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 ran in the latter half of last year and early this year, appearing online, in outdoor marketing and on buses.

The ads claimed ‘on average, our customers saved $240’. This 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.

In particular, 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.

Importantly for the purposes of a price-based comparison, ASIC identified that these differences in the agreed value of vehicles had the potential to impact on represented savings.

‘When comparing products in an ad, the products should have sufficiently similar features to make the comparison relevant and not misleading,’ ASIC Deputy Chairman Peter Kell said.

While the ads included a disclaimer that stated the cover and benefits may differ between the policies being compared, ASIC believes 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 ads); and
  • 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,’ Mr Kell said.