Discovery gap cover advert ‘should have made the waiting period explicit’

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The Advertising Regulatory Board (ARB) has instructed Discovery to withdraw an advert offering maternity benefits on gap cover, saying it was misleading because it did not spell out the waiting period.

The advert, which was placed on Instagram, depicts a happy couple looking at a pregnancy test. The text states: “Free for 3 Months. Are you thinking of growing your family?” The call to action states: “Get gap cover now. Get quote.” The caption goes on to state that the product has “extra maternity cover”.

The ARB received a complaint from a man who said he bought Discovery gap cover after seeing the advert. The cover commenced on 1 January 2024. He found out in April that his wife was pregnant. Discovery rejected his claim, which was when he discovered that a 12-month waiting period applied to maternity benefits.

In its response to the ARB, Discovery denied it did not disclose the waiting period or intentionally deceived the public about the maternity benefit’s terms and conditions.

A consumer who clicked on “Get quote” would be directed to the “Get a quote” landing page on Discovery’s website. The consumer who received a quote would proceed through the gap cover “new business journey”. The customer would have to accept the terms and conditions, which reflect the waiting periods, Discovery said.

It said customers are directed to acquaint themselves with the product’s terms and conditions. Discovery sends new members an email that includes a policy guide outlining the terms and conditions. This was shared with the complainant within 30 days of the policy’s activation.

Misleading impression

The ARB’s Directorate considered whether the advert violated clause 4.2.1 of Section II of the Code of Advertising Practice: “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 Directorate said the ordinary reasonable person who applies for gap cover, or any form of health insurance, would expect the product to have some form of waiting period.

It also accepted that the advert includes the text “Underwriting product rules. Ts&Cs apply”, which suggests that further details relating to the product may be found in the rules and the terms and conditions.

The Directorate said the question was whether this was sufficient within the context of the advert, where the focus is on maternity cover.

It is common practice, particularly where space is limited, to refer consumers to the terms and conditions for further details about the advertised product. These terms and conditions can be used to further spell out the offer in the original advert. But they cannot be used to correct a misleading impression already created by the advert.

The advert is directly related to maternity benefits and appeals to the consumer who is “thinking of growing your family”. The visual implies that the target audience is a family who has just found out about a pregnancy, because it depicts a man and a woman looking at a presumably positive pregnancy test, the Directorate said.

“The implication is that this cover will be useful for you to take out if you have just found out that you are pregnant. This is not the case.”

It said this communication was aggravated by the claim that follows, “We’ve got you covered with extra maternity cover”, whereas the couple depicted in the image will not be covered until well after the baby is born.

The Directorate said the product has a general waiting period of three months and a 12-month waiting period related to claims for pregnancy, childbirth, and a list of other conditions.

The Directorate was the view that if someone viewing the advert was planning to get pregnant, she would expect to be able to use the cover while she was pregnant. It is unlikely that many people thinking of growing their family will get the cover now and then wait a year to get pregnant so that the cover applies.

“Accordingly, the Directorate is of the view that to present the advert as a gap cover specifically to cover extra maternity costs, and then to have a lengthy waiting period of 12 months and not include this limitation in the advertisement is misleading.”

Gap cover product limited to DHMS members

The Directorate said although the terms and conditions for the offer state “underwriting requirements and waiting period will apply”, they do not explicitly state the waiting period. Customers would need to find this condition in the brochure on the website, unless they belong to Discovery Health Medical Scheme (DHMS) and went through the customer journey as described by Discovery.

The Directorate said Discovery could not assume that all customers are DHMS members and would go through the customer journey described by Discovery to find out what the waiting period is. This information must be available online in the terms and conditions before customers sign up for the gap cover.

Moonstone confirmed with Discovery that its gap cover product is available only to DHMS members (excluding members of the KeyCare plans) and asked whether taking this into account would have affected the Directorate’s decision.

Gail Schimmel, the ARB’s chief executive, said a decision by the Directorate is binding until it is overturned, and Discovery could appeal the decision.

Schimmel said she could not comment on whether the information about the product being restricted to DHMS members would have changed the Directorate’s decision, “which goes into more detail and does not rely on this point alone”.

It helps the Directorate if advertisers provide all the relevant information before it makes a decision, but the ARB has a two-stage appeal process that allows for the submission of new evidence, she said.

Discovery’s response to the ruling

In a statement, Discovery said it respected the ARB’s ruling and would abide by it.

“It was certainly not our intention to mislead prospective customers. We take our obligation to ensure that all potential policyholders are fully informed about our products seriously, and we intend to redouble our efforts to ensure that policyholders are able to carefully review the terms and conditions in our application journeys before making any decisions.

“We strive to uphold transparency and clarity in our communications, particularly in respect of the underwriting requirements and waiting periods associated with our products. Discovery’s advertising campaigns are designed to highlight the key features of any product offering, and we carefully design our customer journeys to ensure that the terms and conditions are well explained.”

Discovery said the advert encourages people who are “wanting to grow their family” to consider the additional maternity cover contained in the product offering.

“The 12-month waiting period on pregnancy and birth-related claims was explicitly explained in the medical questionnaire, in an early part of the customer journey before the customer could obtain a quote.”

It said the 12-month waiting period on maternity benefits on gap cover is standard across the industry.

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