Liberty Mutual to pay $925,000 to settle suit alleging its misleading auto ads

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Liberty Mutual will pay $925,000 to settle a consumer protection lawsuit filed by district attorneys in San Diego and several other counties, alleging the company’s auto insurance television ads were misleading, it was announced Thursday.

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The civil complaint, filed in Riverside Superior Court under California’s Unfair Competition Law and false advertising law, alleged that the TV ads failed to properly disclose that the “Accident Forgiveness” benefit featured prominently in the spots is not available in California.

In 2014, Boston-based Liberty Mutual launched a nationwide television ad campaign for auto insurance featuring the Statue of Liberty in the background behind its spokespersons.

Many of the ads focused exclusively on the consumer benefits of Liberty Mutual’s “Accident Forgiveness” car insurance program, according to the suit, which said the campaign reached an estimated 70 to 80 percent of the households in California.

Under Proposition 103, the California Department of Insurance prohibits the offering of programs of accident forgiveness in auto insurance policies in California. However, the Liberty Mutual “Accident Forgiveness” ads failed to prominently disclose that the program in unavailable to California consumers, according to the suit.

The ads typically included a small disclaimer briefly visible at the bottom of the screen, but prosecutors from the San Diego, Los Angeles and Riverside district attorneys’ offices alleged the disclaimers were insufficient to adequately alert viewers that the program is not available in California.

California law requires that all advertising must clearly and conspicuously disclose any material facts that viewers need to avoid being misled.

Under the terms of the judgment, which will be entered without an admission of liability, Liberty Mutual will be subject to an injunction requiring full compliance with California’s advertising laws in its “Accident Forgiveness” advertising, including clear and conspicuous disclosure of the fact that such programs are not available in California.

—City News Service

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