Massachusetts officials ordered Liberty Mutual Group this week to halt a direct mail advertising campaign and pay back drivers who may have lost money from what the state attorney general called the company’s “allegedly misleading” fliers.
Attorney General Martha Coakley announced the results of her office’s investigation into the mailers, which she said promoted lower rates and special discounts not available in Massachusetts. Liberty Mutual is a national insurance firm with headquarters in Boston.
Coakley filed an order in Suffolk Superior Court requiring Liberty Mutual to suspend the ads and pay a $50,000 fine to the state. The insurer also must reimburse new clients who may have been persuaded to buy Liberty’s auto coverage after reading the ads, and allow them to switch carriers without penalty.
“Competition only works if businesses operate on a level playing field,” Coakley said in a written statement. “All insurers have a responsibility to make their advertising clear and accurate.”
Liberty Mutual mailed the advertisements to potential customers in all 50 states and made clear that certain promotions would not apply everywhere, company spokesman Glenn Greenberg said.
“It’s a shame that here, in our home state, we are unable to offer our customers the same competitive products, services and discounts that we do in 49 other states,” he read from a prepared statement. “We have not received a single complaint from a Liberty Mutual customer and we expressly deny any wrongdoing.”
Liberty Mutual’s fliers billed special discounts that customers could receive based on their education, driving record, age and other factors, but the company did not offer those exemptions in Massachusetts, Coakley said. The mailers also touted group rates not available to Liberty Mutual state customers, she said.
The opposite side of the ads contained small print that said the offers would vary from state to state.
Coakley said more than 1,600 drivers bought new insurance from Liberty Mutual because of the promotions advertised on the mailers.
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