The ACCC alleged that Medibank made false, misleading or deceptive representations and engaged in unconscionable conduct in relation to its failure to notify Medibank members, and members of its subsidiary brand ahm, of its decision to limit benefits for in-hospital pathology and radiology services, despite representing across a number of its communication and marketing materials that it would.
The Federal Court dismissed the allegations, finding that:
- Medibank’s use of the word “cover” cannot be read to mean “entirely cover” or “indemnify” and therefore not misleading.
- Medibank did not represent to consumers that it would notify them in advance of detrimental changes to their benefits.
- As Medibank did not engage in misleading or deceptive conduct, it cannot have been unconscionable to its customers.
The ACCC has lodged an appeal to the Full Federal Court for a review of the case.
ACCC Media release – 21 September 2017
Our comment: The outcome of the appeal will be important for both private health funds and private health insurance consumers alike. However, regardless of the outcome, the best way of avoiding litigation is to ensure that representations about the characteristics of goods and services are clear, correct and suitably qualified. Litigating around ambiguity, and whether successful or not, is still litigation and can lead to poor public relations.