The Australian Competition and Consumer Commission (ACCC), having had its case against Medibank Private dismissed by the Federal Court late last month, has lodged a notice of appeal to contend the decision.
The competition watchdog is alleging Medibank Private contravened
Australian Consumer Law by making false, misleading or deceptive
representations, and by acting unconscionably.
The allegations stretch back to 2014 when Medibank, along with its subsidiary
brand ahm, failed to notify members that a limit had been placed on
radiology and in-hospital pathology benefits, even though the marketing
material claimed they were covered.
A reasonable customer would believe no out-of-pocket expenses would have to
be paid for these benefits based on the marketing and communications
material, says Rod Sims, chair of the ACCC.
"It is important that the ACCC seeks clarity from the Full Federal Court on
this case," he says.
"In particular, the extent to which it was acceptable for Medibank not to
fully inform vulnerable consumers about changes to their private health
Medibank, which is Australia's largest health insurance provider, will defend the claims made by the ACCC, says Craig Drummond, the company's chief executive.
"Medibank defended the case because we firmly believed that we had not
acted unconscionably nor did we mislead or deceive our customers," he says.
"We are disappointed that the ACCC has decided to appeal the decision,
after none of the ACCC's allegations were substantiated and the matter was
dismissed with costs."
In dismissing the case last month, the Federal Court found the use of the
word "cover" in marketing did not imply full coverage, and that Medibank
did not mislead customers because it never pledged to notify them of
The court concluded that, by not engaging in misleading or deceptive
conduct, Medibank could not have acted unconscionably to its members.
The legal action was originally launched by the ACCC against Medibank in
Another court action was launched in May 2017 by the ACCC against health
insurance provider NIB, after it stopped covering the costs of certain
hospital procedures without notifying members.
The court actions are part of the ACCC's enforcement and compliance
priorities for 2017, as it focuses on unfair contract terms, cartels, and
misconduct in the health, construction and agriculture sectors.