If you watch television, you have probably seen the TV ad campaign that Liberty Mutual has been rolling out for over a year. In the commercial, a person tells “their” story about how other insurance companies did them wrong, and insists that they should have gone with Liberty Mutual. The slogan “accident forgiveness” is supposed to portray Liberty Mutual as a company who understands the mishaps of life, and doesn’t punish their customers for accidents by increasing rates.
A great advertising campaign, it was effective. The commercial did motivate many people to switch insurance carriers. However, it may have been misleading, to the point of being unlawful. “Accident forgiveness,” as described by the narrator of the commercial, is not legal in all the places where the car crash attorney 2017 company ran their marketing campaign.
Today, Liberty Mutual is probably regretting that commercial. Last week, the company reportedly had to pay over $925,000 dollars to three South California district attorney’s offices. Why? Apparently, everyone in the country was eligible for the forgiveness program except for California residents. There was no disclaimer indicating that the branches of Liberty Mutual that serve the California area could not forgive their customers.
The district attorney’s offices filed a suit against Liberty Mutual under the Consumer Protection Act. They insisted that the commercial was misleading and unlawful because it did not include a disclaimer about the exception in California. The ad was aired in California without letting customers know that there was an exception, so they sued for damages.
The California Department of Insurance in California prohibits the practice of “accident forgiveness”. Those who saw the commercial weren’t warned that accident forgiveness was legally prohibited in California, which was false advertising.
In California, there are laws against advertising that avoids disclosing these kinds of facts, thereby potentially misleading consumers.. Those in California who watched the national campaign were not told of the state’s exception, and were therefore misled.
Glenn Greenberg, a spokesman for the Liberty Mutual company, maintains that they do not believe that they misled California residents in any way. Although they have paid the penalties, they do not accept an admission of guilt. It was easier to pay the penalty than to fight it in court.
The problem is that the commercial, according to research, reached as many as seventy to eighty percent of households in the California area. Liberty Mutual had an obligation either to have a disclaimer or not to show the advertising campaign in California.
A civil complaint was filed in the Riverside Superior Court under false advertising and unfair competition law. Attorneys maintained that if someone saw the commercial in California and wrongly assumed that they were eligible for “accident forgiveness” when they were not, it could have taken customers away from other insurance agencies under false pretenses.
Under the agreement, the Liberty Mutual campaign must be altered in California to include a disclaimer about the exclusion of residents in California, or the company must stop running the ad in that state altogether. Greenberg maintains that, since the incident, there is now a disclaimer that runs along the bottom of the advertisement to let Californians know that there is no such program allowed in their state.
In addition to the $925,000 that they’ve paid to the district attorney’s offices, Liberty Mutual is on the hook for another $830,000 in civil penalties. That is a hefty price to pay, but one that is necessary. Since there is a legal mandate in California, specifically Proposition 103, Liberty Mutual should have never advertised a product that wasn’t legal in a specific location without adding a disclaimer.
Liberty Mutual’s accident foregiveness program is a real one, and it is available in every US state except for California. This appears to have been an oversight on the part of either Liberty Mutual, or the advertising agency they contracted to create the commercial Liberty Mutual may not have intended to mislead the consumer. But ignorance is not a legal defense. Sometimes a little more research and a small disclaimer can save a company quite a bit of money.
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