One of Australia's largest health funds will retract false and misleading letters sent to consumers in South Australia, NSW and Queensland, after action by the Australian Competition and Consumer Commission.*
Acting ACCC Chairperson, Mr Allan Asher, announced an agreement with MBF to correct false and misleading statements made to consumers about MBF's 100% health cover product.
"The ACCC was alerted to letters sent to Queensland consumers by the Federal Minister for Health, Dr Carmen Lawrence, which claimed that 'new legislative requirements mean that all members [on particular health tables] must transfer to our 100% hospital service by July 1997'. This was not the case," Mr Asher said.
"Subsequent discussions by the ACCC with MBF revealed that other letters sent to contributors in South Australia and NSW made further misleading statements about the requirements to upgrade to MBF's 100% cover.
"MBF has agreed to:
- write a corrective letter to contributors in Queensland, NSW and SA who received the incorrect information;
- notify contributors that they may return to their previous level of cover, or transfer to another level, at no cost;
- publish corrective advertisements in a number of national and provincial newspapers; and
- implement a trade practices education compliance program.
"The ACCC believes the corrective letters alone will cost MBF a considerable amount. There will also be significant costs in the advertisements, the compliance program and the loss of goodwill suffered by the fund," Mr Asher said. "The ACCC notes that MBF moved quickly once the problem was brought to its attention.
"The health industry will be a major focus of the new ACCC's priorities. Today's action is a warning that all aspects of the industry will be monitored and transgressions acted upon swiftly.
"The ACCC has already held extensive discussions with health industry representatives including doctors, specialists, funds, and hospital associations about their additional responsibilities under the Trade Practices Act."
This is the first Section 87B undertaking received by the ACCC since its formation on 6 November 1995. The ACCC was formed from the merger of the Trade Practices Commission and the Prices Surveillance Authority.