We have discussed in earlier articles what types of conduct will be considered illegal in advertising under Australia’s Consumer Law (ACL). Now, we look at how you can avoid falling foul of the ACL by outlining some key principles for advertising promotion in our two-part series. Below, we look at the importance of the overall impression the ad creates.

Consider the Overall Impression Created

The advertisement’s overall impression on consumers becomes especially important when considering disclaimers and fine print. If the advertisement or promotional material’s overall impression is misleading, an attempt to correct this through disclaimers and fine print would be unsuccessful. A good example of this principle at work is the Medical Benefits Fund (MBF) case. On September 2001, a single judge of the Federal Court (Justice Hill) delivered a judgment against MBF. The ACCC brought an action against MBF and an employee of its advertising agency as an accessory to a breach of the ACL. Among other things, the ACCC alleged misleading and deceptive conduct in some television advertisements where MBF advertised an “instant cover” offer.

Facts of the Case

In the months before the Federal Government’s July 2000 “Lifetime Health Cover” initiative, MBF utilised the services of their advertising agency, John Bevans Pty Ltd. MBF launched a large advertising campaign to boost membership, part of which involved a series of television advertisements that followed a couple on the birth of their baby.

In one advertisement, the couple is shown celebrating the birth of their child and expressing thanks for MBF’s help. The ad’s voiceover then says, “join MBF hospital cover before 30 June and they waive the two and six-month waiting periods.”

The final few seconds of the ad contained large text telling viewers to “visit a member centre”, and below in approximately half the text’s original size was, “twelve-month waiting periods such as pre-existing conditions and obstetrics still apply”.

Justice Hill held that the television advertisement was misleading and deceptive. It would, or be likely to, mislead a reasonable person concerned with their health cover that saw the advertisement.

What Was the Outcome of the Case?

His Honour held that the first and dominant impression was that MBF would waive waiting periods for obstetrics. Images of the happy couple celebrating their baby’s birth delivered the message, and the following statements did not counter the effect of this impression.

Interestingly, his Honour took into consideration evidence from two couples who had recently had a child. MBF’s advertisement misled the two couples into believing that they had waived the waiting period on obstetrics. Also, the rush to get cover to meet the government’s “lifetime health cover” deadline meant misled customers who contacted the member centre had difficulty getting through to speak to customer service officers about the terms of the health insurance. MBF effectively forced customers into making quick decisions, without being able to consider all of the terms. Justice Hill ordered MBF undertake corrective advertising.

In our next article, we continue to look at how you can comply with advertising regulations when crafting your next campaign.

Questions? Get in touch with LegalVision’s specialist advertising and marketing lawyers on 1300 544 755.

Catherine Logan
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