Virgin Money Australia has just paid $30,600 in penalties after ASIC issued three infringement notices for misleading online and television advertising.
Each infringement notice came with a penalty of $10,200.
The misleading representations related to the promotion of Virgin Money’s “Quick & Easy” life insurance product.
The advertisements appeared on television up until May 2013, and online up until March 2014.
ASIC’s concerns were that the advertising was misleading about the process involved in applying for the product, and the life insurance coverage under the product.
Namely, the advertisement indicated that “no health or lifestyle questions” would be asked by Virgin Money, when in fact the application form contained specific health and lifestyle questions such as queries around smoking habits. Responses to the questions were used to calculate premiums.
The advertisement also claimed that “weight is not a factor that affects coverage of the product”, when in fact weight could be a relevant factor in determining coverage under Quick & Easy.
The payment of an infringement notice is not an admission of a contravention of the Australian Securities and Investment Commission Act 2001 consumer protection provisions.
This year, ASIC has taken action against six organisations for misleading advertising, with penalties totalling more than $120,000.
At the beginning of April the regulator also confirmed that it was investigating the Industry SuperFund (ISF) “Compare the Pair” campaign that has drawn widespread discussion.
The new campaign - of which a similar older version was once suspended after ASIC concerns it was misleading -highlights a difference in the performance between an industry and a retail fund.
In an oversight of ASIC at the Parliamentary Joint Committee (PJC) for corporations and financial services, ASIC commissioner Greg Tanzer confirmed that the watchdog was looking at the campaign in the context of the complaints that have been made to ascertain whether it is fair or misleading.
But in a press release, a representative of ISF justified why the new campaign is not questionable in the same way as the old one.
He stated that unlike the original campaign, which used forward projections to estimate the impact of on-going sales commissions on a person’s super account balance at retirement age, the new one uses a model which looks back over the last ten years to compare average net returns that Industry SuperFunds could have delivered their members, compared to the average delivered by retail funds.