Rod Sims, the Chairman of the ACCC, talks about why they have taken NIB to court, accusing it of “unconscionably” concealing changes to a scheme that left members with out-of-pocket costs.
Ross Greenwood: Welcome back to Money News. You can hear it’s a busy night for the program. We will be very shortly speaking with the chief executive of the Australian Banker’s Association, Anna Bligh, as the new bank levy legislation has moved into the Parliament. We’ll also speak a little later with the treasurer, Scott Morrison, in regards to that. Plus, also, in the aftermath of the revelations inside the Senate estimates hearing from the tax commissioner today in regards to Paul Hogan, the actor. We will speak with Paul Hogan just after our 7 o’clock news. But also, today, there is another big story out there, and that is one of Australia’s largest health insurers, NIB, has been basically hit with an allegation of misleading and deceptive conduct by the Australian Competition and Consumer Commission. This is in regards to telling members in advance, or not telling its members in advance, that it would remove some eye procedures from a program that protected customers from out-of-pocket costs. There’s another one also, and that is that one of those vocational learning organizations, Acquire Learning in this particular case, has been ordered to pay four and a half million dollars in a fine, plus more money in regards to having been found to have taken advantage of vulnerable students. Let’s go to the ACCC Chairman, Rod Sims, who is on line right now. Thanks for your time, Rod.
Interview with Rod Sims – what has happened to NIB Health Insurer?
Rod Sims: How are you going, Ross?
Ross: Good, thank you. Can I start with the health insurer NIB? I mean, it’s a big health insurer. What are you suggesting has taken place here?
Rod Sims: In short, Ross, that, for example, prior to August 2015, there were people who would have read the NIB’s website and were led to have taken from that that they wouldn’t have any out-of-pocket expenses if they went into hospital for these eye injections, these elderly people usually with degenerative eye diseases that could cause blindness, that when they went to the hospital, they in fact did not have any out-of-pocket. In August 2015, we allege NIB changed that policy and did not tell their members that this had happened. So when their members went to hospital after August 2015, they got hit with some pretty hefty out-of-pocket expenses. So, we’re alleging misleading conduct, but also because we understand that from the documents we’re able to get, that NIB really knew they should have told the members. Indeed, they took steps to make sure members weren’t told, and so we’re also alleging unconscionable conduct.
Ross: Can I make an observation to you in regards to private health insurance policies that they are almost illegible to an ordinary person? I would not have any idea as to what my out-of-pocket expenses are or are not, and I think that that is one of the most reprehensible situations that has occurred with private health insurance policies overall.
Rod Sims: Absolutely Ross. We did a market study a couple of years ago and that found two things: one, is what you’ve just said, that they’re extremely hard to compare to work out what you’re getting, what you’re not getting. And secondly, we came across this issue where some funds weren’t telling consumers when they made deliberate changes to the policies that affected their members.
Ross: Can I take you to another aspect? This is Acquire Learning. We know that vocational education has been a scandal in this country and we also know of the work that the ACCC has done in trying to clamp down on many of them offering laptops and a range of other false inducements to get people to study. In many cases, courses that they would never finish with the tens of thousands of dollars of potential fees. Just in regards to Acquire Learning, what has happened there?
Rod Sims: We’ve had a penalty judgement today, Ross, where Acquire have been ordered to pay a penalty of $4.5 million. That is a fairly hefty penalty under current Australian consumer law penalties and it’s a very strong judgement, Ross. The judge said, for example, Acquire’s activities resemble those of an unscrupulous fly-by-night operation rather than those of a prominent market leading provider of student recruitment–
Ross: Just a quick one. That company is now at administration, are you going to get the dough out of them or not?
Rod Sims: We’re working with the liquidators to try to do what we can, Ross. It’s important that we do, but we’re working with the liquidators.
Ross: Tell you what, it’s going to be interesting to watch that one as well. The chairman of the ACCC, always great with his time here on the program and Rod, we appreciate it this evening.
Rod Sims: Thank you Ross.