California is not forgiving Liberty Mutual for misleading consumers

A screen shot of one of the misleading television ads [Source: YouTube]

A screen shot of one of the misleading television ads [Source: YouTube]

Marketers can learn a valuable lesson from Liberty Mutual Insurance today, but it’s one that is hopefully taught in most Marketing 101 classes: review your advertisements for all regulatory compliance or it could cost you big time. In Liberty Mutual’s case it’s to the tune of $925,00 in penalties in California, not to mention the very real damage to its reputation and brand.

The Riverside County District Attorney’s office announced today in a press release that a consumer protection lawsuit against the Boston-based insurance company has resulted in a settlement. The civil complaint alleges violation of California’s false advertising laws by failing to disclose to consumers in the ads that “accident forgiveness” was in fact not available in the state yet countless advertisements had been running in California for over two years. State law requires that all advertising must clearly and conspicuously disclose any material facts that viewers need to avoid being misled. It is alleged in a complaint filed in the case that the disclaimers in the Liberty Mutual ads were unlawful because these ads could convey “an overall impression that California consumers would receive this benefit as part of Liberty Mutual car insurance,” which was not true.

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