One Big Switch, the consumer action group, has been forced to review its compliance with financial services laws after the Australian Investments and Securities Commission (ASIC) found it had operated without an appropriate licence.
The review relates to a 2014 campaign conducted by One Big Switch relating to home insurance under which more than 74,000 consumers purchased insurance while the company did not hold an appropriate Australian financial services (AFS) licence.
One Big Switch then gained a licence after ASIC raised concerns about its actions and imposed conditions on the licence that One Big Switch appoint an independent consultant to review its compliance with financial services laws and rectify any deficiencies identified by the expert.
The independent consultant – Kemp Strang Lawyers – has found in an initial report to ASIC that advertising of recent insurance campaigns by One Big Switch contained potentially false and misleading statements. A further review is underway with a final report due in September of this year.
The initial report stated the advertising featured a ‘price beat guarantee’ but did not provide prominent and proximate qualifications to the offer, such as a minimum age requirement, and the need to be switching from a comparable policy.
It also found the advertising stated an ‘average 30% saving on life insurance’, when the pricing of this product depended on the health and lifestyle of the individual applicant.
ASIC was also concerned about an advertisemenbt for car insurance via 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, which operates as a for profit business, was launched in 2011 off the back of a Choice campaign titled ‘Big Bank Switch’ and now offers discounts on home loans, electricity, gas, solar panels, health insurance and broadband internet. Its website states it holds an AFS licence and is a member of the Financial Ombudsman Service.
As a result of ASIC’s concerns One Big Switch has agreed to improve its compliance on advertising ensuring ads do not contain misleading statements and any claims made are appropriately qualified.
