HEALTH INSURER NIB ACCUSED BY ACCC OF MISLEADING ITS MEMBERS

HEALTH INSURER NIB ACCUSED BY ACCC OF MISLEADING ITS MEMBERS
THE COMPTITION regulator has launched proceedings in the Australian Federal Court against NIB Health Funds Limited (NIB) over alleged misleading or deceptive conduct.

The Australian Competition and Consumer Commission (ACCC) alleges NIB contravened Australian consumer law by engaging in misleading or deceptive conduct, unconscionable conduct and making false or misleading representations.

The insurance company has rejected the allegations and says it will fight the case.

The allegations arise from an investigation by the ACCC into NIB's "MediGap Scheme" in 2015.

The ACCC claims NIB failed to notify members in advance of its decision to remove certain eye procedures from the MediGap Scheme. Previously members had been able to obtain eye procedures without facing out-of-pocket costs.

It is also alleged that NIB made this representation by paying the gap amount on behalf of members for these eye procedures prior to August 2015.

The element of 'unconscionable conduct' is alleged in two situations where the ACCC believes the company failed to provide advance notice of the MediGap change to its members.

The ACCC alleges that NIB had identified over 400 members who received two or more eye procedures in the previous financial year in circumstances and that NIB's management considered they "probably ought to proactively communicate" with these members but did not.

It also alleges a doctor associated with Newcastle Eye Hospital sent a letter to patients who were NIB members informing them of the MediGap change and their right to move to a new insurer. It's claimed NIB contacted the hospital to request a commitment that its medical practitioners not communicate with NIB members or the media about the MediGap change.

ACCC chaiman Rod Sims says consumers have a right to know and understand any changes in policy from insurance companies.

"Consumers have a right to be informed of important changes to their insurance cover in advance, as these changes can result in very large financial consequences at a time when consumers are at their most vulnerable," says Sims.

"Insurers should not expect consumers to bear the responsibility of making independent enquiries to find out about important changes made unilaterally by insurers."

In a statement made today by NIB, the insurance company flatly rejected the allegations and say they will defend the claims.

"NIB rejects the position being taken by the ACCC and believes it has acted lawfully and ethically," the company says.

"NIB is committed to acting in the best interests of our customers and will strenuously defend the claims made by the ACCC in the Federal Court.

"As this matter is now before the Federal Court, we are unable to make any further comment on the allegations."

Never miss a story: Sign up to Business News Australia's free news updates

Follow us on Twitter, Facebook, LinkedIn and Instagram

Get our daily business news

Sign up to our free email news updates.

 
Unpacking equity: Finding your funding fit
Partner Content
Armed with a growing business and a great opportunity, a business owner’s next challe...
Australian Business Growth Fund
Advertisement

Related Stories

Australian Ethical profit up six-fold as customer numbers rise

Australian Ethical profit up six-fold as customer numbers rise

Sydney-headquartered investment manager Australian Ethical (ASX: AE...

Hotel Property Investments CEO Don Smith passes away

Hotel Property Investments CEO Don Smith passes away

Following a successful career of almost two decades with Vicinity C...

Australian data protection authority received almost 500 breach reports in December half

Australian data protection authority received almost 500 breach reports in December half

While it’s no secret that cybersecurity attacks have posed a ...

The secret sauce of Coles’ and Woolworths’ profits: high-tech surveillance and control

The secret sauce of Coles’ and Woolworths’ profits: high-tech surveillance and control

Coles and Woolworths, the supermarket chains that together control ...