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Misleading car insurance ads

Maine Superintendent of Insurance Eric Cioppa has ruled against Progressive Corp.’s request to raise car insurance rates for seniors in Maine.

Progressive had been seeking state approval for rate changes that would allow the company to charge older Mainers higher auto insurance premiums based solely on their age. The proposal by the Ohio-based company would have applied only to new customers in Maine, according to documents filed with the state Department of Professional and Financial Regulation’s Bureau of Insurance.

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A hypothetical example that Progressive provided to the bureau showed a 65-year-old being charged 6 percent more than a 64-year-old based solely on the customer having reached age 65.

Increasing rates for seniors based on their age alone would have been a major departure from the way most insurance companies operate nationwide and in Maine, which has a population that leads the nation in average age. Healthy drivers with flawless driving records typically see their premiums decrease as they age.

In his ruling against Progressive, Cioppa noted that Progressive’s requested rate hike would have affected as many as 65,000 policyholders in Maine. He said the change would have violated a section of Maine’s insurance code that protects drivers from arbitrary rate increases based on their age.

“No insurance company authorized to transact business in this state shall cancel, reduce liability limits, refuse to renew or increase the premium of any automobile insurance policy of any kind whatsoever for the sole reason that the person to whom such policy has been issued has reached a certain age,” Cioppa quoted the insurance code as saying.

Progressive spokesman Jeff Sibel said that while the company had the right to appeal Cioppa’s ruling, it has decided to put the matter to rest.

“We decided to abide by that decision and have dismissed the administrative action,” Sibel said via email. “There are no longer any administrative proceedings pending in Maine regarding this issue and the matter is terminated.”


Under Maine law, the superintendent has the authority to regulate auto insurance rates in the state to ensure that they are not “excessive, inadequate or unfairly discriminatory.”

In his ruling, Cioppa stated that the insurance bureau has in the past received insurance rate filings that contained higher rate classifications for older drivers, such as those over 70 or 75. However, he said those rate requests involved “a multivariate analysis of loss expectation.”

Cioppa said that where Maine draws the line is when an insurer seeks to raise an insured driver’s premium “solely due to the advancement in age or the movement to another age group.”

“It is the Bureau’s position that an insured’s premium may not increase if the only change is the change in the age of the insured,” he said.

A hearing Progressive requested to discuss the proposed rate increase had been scheduled for Aug. 16. However, Cioppa said in his ruling that Progressive withdrew its hearing request in late July. Still, he said that as superintendent he had the authority to issue a ruling without the hearing.

Cioppa noted that his ruling was “without prejudice,” meaning that Progressive maintains the right to have the bureau revisit the issue in a future rate filing.

Progressive had initially asked the bureau to allow it to raise the rates of all new and existing customers in Maine as they age, but the bureau denied that request in June, saying it would violate state law. However, the bureau had agreed to discuss further the possibility of increasing rates for new customers only.

When news of Progressive’s rate request was publicized, it received criticism from AARP Maine State Director Lori Parham, U.S. Sen. Susan Collins and others. Collins, a Republican, sent a letter to Progressive President and CEO Tricia Griffith demanding an explanation for the company’s rate request.

“As Chairman of the Senate Aging Committee, I have been greatly concerned by Progressive’s discriminatory proposal to increase auto insurance rates for seniors, which would have imposed significant hardships on older individuals, particularly those who have limited incomes or lack access to transportation alternatives,” Collins said Wednesday via email. “Last month, I wrote to Progressive’s CEO to raise my concerns as well as to request justification and additional information for its rate increase in Maine and nationally. I am pleased that the Maine Bureau of Insurance has rejected Progressive’s proposal. The company’s filing highlights the need to ensure that auto insurance practices do not discriminate against seniors.”

In July, state Rep. Henry Beck, a Democrat who represents parts of Waterville and Oakland, submitted to the Revisor’s Office a proposed amendment to the Maine Insurance Code in response to Progressive’s request that, if adopted, would bar all insurers in Maine from seeking age-based increases for older drivers in the future.

“This is good news for Maine seniors,” Beck, who is House chair of the Insurance and Financial Services Committee, said of the ruling. “There remains more work to be done to ensure that price hikes based solely on a senior getting older do not take place under other circumstances. My bill would make certain that does not happen here in Maine.”

About 14 percent of Maine drivers had policies through Progressive and its affiliates in 2014, according to the most recent Bureau of Insurance figures.

One factor that could have been driving the company’s request is Maine’s higher-than-average rate of fatal accidents involving drivers 65 and older. Maine led the nation in 2012 and 2013 with the highest share of older drivers involved in fatal accidents, according to National Highway Traffic Safety Administration data. In 2012, the share of fatal accidents involving drivers 65 and older in the United States was 12.7 percent. In Maine it was 18.6 percent. In 2013, the share nationally was 13.3 percent, and in Maine it was 20.6 percent.

Overall, Mainers paid $758 million in auto insurance premiums in 2014, according to the latest figures from the National Association of Insurance Commissioners.

Parham, the state’s AARP director, applauded Cioppa’s ruling and said her organization believes that approving Progressive’s request would have set a “dangerous precedent” in Maine.

“It also would have sent the wrong message to older Mainers and those looking to retire here,” she said.

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There are laws in place to protect you from being misled about the products and services you buy.

Creating a false or misleading impression

Businesses are not allowed to make statements that are incorrect or likely to create a false impression.

This rule applies to their advertising, their product packaging, and any information provided to you by their staff or online shopping services.It also applies to any statements made by businesses in the media or online, such as testimonials on their websites or social media pages.

For example, businesses cannot make false claims about:

  • the quality, style, model or history of a product or service
  • whether the goods are new
  • the sponsorship, performance characteristics, accessories, benefits or use of products and services
  • the availability of repair facilities or spare parts
  • the need for the goods or services
  • any exclusions on the goods and services.

It makes no difference whether the business intended to mislead you or not. If the overall impression left by a business’s advertisement, promotion, quotation, statement or other representation creates a misleading impression in your mind—such as to the price, value or the quality of any goods and services—then the behaviour is likely to breach the law.

There is one exception to this rule. Sometimes businesses may use wildly exaggerated or vague claims about a product or service that no one could possibly treat seriously or find misleading. For example, a restaurant claims they have the ‘best steaks on earth’. These types of claims are known as ‘puffery’ and are not considered misleading.

Examples of false or misleading claims

Some examples of business behaviour that might be misleading are:

  • a mobile phone provider signs you up to a contract without telling you that there is no coverage in your region
  • a real estate agent misinforms you about the characteristics of a property by advertising 'beachfront lots' that are not on the beach
  • a jewellery store advertises that a watch 'was' $200 and is 'now' $100 when the store never sold the watch for $200
  • a business predicts the health benefits of a therapeutic device or health product but has no evidence that such benefits can be attained
  • a transport company uses a picture of aeroplanes to give you the impression that it takes freight by air, when it actually sends it by road
  • a company misrepresents the possible profits of a work-at-home scheme, or other business opportunity.

False or misleading advertising

These are some of the most common types of false or misleading advertising reported to the ACCC.

Fine print and qualifications

It is common practice for advertisements to include some information in fine print. This information must not contradict the overall message of the advertisement. For example, if an advertisement states that a product is ‘free’ but the fine print indicates some payment must be made, the advertisement is likely to be misleading.

Comparative advertising

Some advertisements or sales material may compare products or services to others on the market. These comparisons may relate to factors such as price, quality, range or volume.

Comparative advertising can be misleading if the comparison is inaccurate or does not appropriately compare products.

Bait advertising

Bait advertising takes place when an advertisement promotes certain (usually ‘sale’ prices) on products that are not available or available only in very limited quantities. It is not misleading if the business is upfront in a highly visible, clear and specific manner about the particular product ‘on sale’ being in short supply or on sale for a limited time.

Environmental (‘green’) claims

Environmental claims may appear on small household products such as nappies, toilet paper, cleaners and detergents through to major white goods and appliances. They may include statements about environmental sustainability, recycling, energy and water efficiency or impact on animals and the natural environment, for example 'green', 'environmentally safe' or 'fully recycled'.

Businesses making these claims must be able to substantiate them.

If you think you have been misled

Make a consumer complaint

More information

Country of origin
Drip pricing
Olive oil
Organic claims
Prices & receipts
Social media
Your consumer rights – environmental claims
Your consumer rights – Indigenous art and craft


Statistics Blog > Misleading Statistics Examples

In my previous post, I wrote about misleading graphs in real-life. Misleading statistics examples ranged from Fox News’ coverage of politics to The Times newspaper’s claim that it beat the competition with slightly distorted graphs about circulation. Graphs aren’t the only way to distort statistics. In fact, stats are very easy to distort because most people don’t understand stats — even “experts!” See Even Physicians Don’t Understand Statistics for a run-down on how doctors frequently misread stats about your odds of cancer. Misleading statistics examples are abundant in advertising and in the news. Here are some of the most famous misleading statistics examples…and the most distorted.

Misleading Statistics Examples in Advertising.

80% of dentists will recommend everything.

Hobbit trilogy blu ray sainsbury's car insurance

Image: Manchester Evening News.

Anyone remember Colgate’s claim that 80% of dentists recommended the brand? You won’t be seeing that slogan again, at least not in the UK. Consumers were led to believe that 80% of dentists recommended Colgate while 20% recommended other brands. It turns out that when dentists were surveyed, they could choose several brands — not just one. So other brands could be just as popular as Colgate. This completely misleading statistic was banned by the Advertising Standards Authority.

If it sounds to good to be true…

Insurance rates per car modelIn 2009 and 2010, Reebok made the following claims about its EasyTone and RunTone shoes: Lab tests “proved” that the shoes work “your hamstrings and calves up to 11% harder and tone your butt up to 28% more than regular sneakers … just by walking!”. The figures turned out to be complete garbage. The FTC stated that Reebok needed to pay a settlement of $25 million for deceptive advertising.

In the News…”

“70 cents of every dollar spent on food stamps goes to bureaucrats” Rep. Michelle Bachmann (R-Minn) (2013)

That quote, from Republican Michelle Bachmann, is completely false. The actual figure is one third of one percent! You can find the real figure here at USDA.gov.

Perhaps the most famous case ever of misleading statistics in the news is the case of Sally Clark, who was convicted of murdering her children. She was freed after it was found the statistics used in her murder trial were completely wrong.

Misleading Statistics Examples in Advertising and The News was last modified: July 12th, 2016 by Andale


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