The Australian Competition & Consumer Commission (ACCC) has revealed that health insurance comparison business Health Insurance Comparison Choosewell (HICC) has breached the Australian Consumer Law (ACL).
HICC engaged businesses as third-party lead generators to initiate unsolicited contact by phone with consumers on its behalf, before negotiating agreements with those consumers for the supply of health insurance services by a partnered insurance provider.
According to the ACCC, HICC admitted failing to inform its consumers of their termination rights, including a 10-business-day cooling-off period when entering into unsolicited consumer agreements for private health insurance (PHI).
Specifically, the health insurance comparison business entered into unsolicited consumer agreements without informing consumers verbally and in writing of their rights under the ACL to terminate the contract, how they could terminate the contract, and that the health insurance provider was not allowed to seep payment until after the 10-business-day cooling-off period.
As a result, the ACCC accepted a three-year court-enforceable undertaking from HICC, in which the company has committed to not entering unsolicited sales contracts without giving consumers verbal and written information about their termination rights, as well as notifying the relevant health insurance providers that the contract resulted from an unsolicited consumer agreement.
Moreover, the company paid a penalty of $13,320 for its failure to give consumers information about their termination rights in writing after the telephone call where the negotiations occurred. It will also implement a compliance program focusing on the ACL requirements for unsolicited consumer agreements.
ACCC Commissioner Liza Carver warned businesses that they cannot avoid their obligations related to unsolicited consumer agreements under the ACL by employing third-party lead generators to contact consumers on their behalf.
“The Australian Consumer Law is designed to protect consumers from salespeople who contact them without prior invitation or request at home, in public, or over the telephone,” she said. “Consumer protections in relation to unsolicited consumer agreements include a 10-business-day cooling-off period in which a consumer can cancel the agreement for any reason without a penalty or payment being taken. Businesses involved in unsolicited sales, or their representatives, must also inform consumers of their rights and how to exercise them.”
