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Home Rulings NEDBANK / CREDIT CARD INSURANCE / SATHISH RAMDAS / 2018 – 7869F

NEDBANK / CREDIT CARD INSURANCE / SATHISH RAMDAS / 2018 – 7869F

Mr Ramdas lodged a consumer complaint against the Respondent’s online advertising promoting its credit card insurance accessed at:  https://www.nedbank.co.za/content/nedbank-insurance/.../creditprotection/card.html
 
The advertising states "Credit cards are a great way of accessing money when you really need it. But as a responsible family member you need to make sure that you could still cover your credit card balance or monthly repayments should something happen to you. 

Our credit card insurance protects you and your family’s finances should you pass away, be disabled, suffer from a critical illness or be retrenched. So although you may not be able to earn a living anymore, you could still pay off your credit card debt.”

COMPLAINT

The Complainant submitted that the advertising is misleading as the Respondent only paid a small amount when he lodged his insurance claim. He argued that this is glaringly contrary to the claim made in the advertisement.

RELEVANT CLAUSE OF THE CODE OF ADVERTISING PRACTICE

In light of the complaint, the Directorate considered Clause 4.2.1 of Section II (Misleading claims) of the Code to be relevant.

RESPONSE

The Respondent submitted that the cover taken by the Complainant is a "Payment Protection Plan” which covers the outstanding credit card debt on a credit card on the date a valid claim event occurs, namely Death, Disability, Critical Illness and Retrenchment events. The cover is subject to the terms and conditions contained in the policy documentation. 

The Complainant applied for and entered into a contract of insurance with Nedgroup Life Assurance Company ("Nedgroup Life”) on or about 1 November 2007. The advertising was placed by Nedgroup Life in the public domain on the website in question on 16 November 2016. As the insurance contract predated the advertising by some time, its submission is that the Complainant could not possibly have been misled by the concerned advertising.      

ASA DIRECTORATE RULING


The ASA Directorate has considered all the relevant documentation submitted by the parties. 

Clause 4.2.1 of Section II provides that "Advertisements should not contain any statement or visual presentation which, directly or by implication, omission, ambiguity, inaccuracy, exaggerated claim or otherwise, is likely to mislead the consumer”.

The Complainant submitted that the advertising is misleading as he was paid small amount and therefore the Respondent did not leave up to its promises as contained in the advertising. 

The Respondent refuted the Complainant’s allegation by argued that the Respondent took the credit cover contract in 2007 and the advertising was only published in 2018. The Complainant confirmed that "The suggested date may be correct as it has been some time ago”.    

There are two issues that flow from this. The first is that the Complainant cannot have been misled by the advertising, as he took out the cover a decade before it was published. The second is that the type of cover that the Complainant took out may not be the same as the cover that is now offered.

Finally, the Directorate notes that the material quite clearly states: "So although you may not be able to earn a living anymore, you could still pay off your credit card debt.” It is also clear from the wording of the advertising submitted by the Complainant himself that different policies have different cover limits. The Complainant has not given insight into what cover limit he took out, nor how that relates to advertising of policies ten years later.

According to the submissions made by the Respondent, the "small amount” paid out to the Complainant was, indeed, his credit card debt payment in terms of the policy that he took out. It would appear that the Complainant has expected something more than this. However, in this regard, the Insurance Ombud with jurisdiction would be the more correct dispute resolution forum.

Given all these factors – that the policy predates the advertising, that the advertised policy may not be the same as the Complainant’s policy, and that the Complainant appears to have, in fact, been paid out in towards his credit card debt in terms of his policy - it is the Directorate’s view that the Respondent’s advertising is not in contravention of Clause 4.2.1 of Section II of the Code.  

The complaint is dismissed.

      

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