‘Misleading’ Aviva annuity ad banned
December 23, 2010 by Rachel Charman
Author: Rachel Charman
IFAonline| 22 Dec 2010 | 10:30
A TV advert for Aviva, in which the insurer claims it can provide 20% more income for annuity customers, has been banned by the Advertising Standards Authority (ASA).
The advert, starring Paul Whitehouse, features a voiceover saying: “when you retire get up to 20% more income with Aviva”.
However, four viewers challenged this claim as misleading before the ad finished its scheduled run in the summer.
Aviva claims its annuity rates are 20% or more above those of its competitors in 22% of cases.
The insurer also says the inclusion of the words ‘up to 20%’ in the advert makes it clear not all of its annuities will be 20% above those of competitors.
However, ASA’s assessment of Aviva’s data found although Aviva’s 648 comparisons of its own annuities with those of competitors did show its deals to be better in 22% of cases, the likelihood of many of the scenarios Aviva tested was questionable.
“We therefore considered it was not necessarily safe to assume the percentage of cases in which Aviva offered an annuity rate of 20% or more corresponded to an equal percentage of real customers,” ASA says in its ruling.
Additionally, ASA found in the majority of cases where Aviva’s annuities were better, the provider had only compared its rates to three of the possible nine other open market competitors.
When compared to all nine competitors, ASA found Aviva’s retirement incomes were 20% higher than its competitors in only 3% of cases.
The ASA concluded Aviva’s ad is misleading, and must not be broadcast in its current form again.
Tom McPhail, head of pensions research at Hargreaves Lansdown, says:
“This case highlights the fact that a lot of consumer detriment occurs below the radar.
“It is often difficult to obtain comprehensive data on annuity providers who do not quote on the open market and it was here Aviva struggled to substantiate its claims. Yet the evidence available suggests in many cases shopping around can deliver benefits of substantially more than the 20% quoted by Aviva.
“The only way to fix this problem is to make shopping around the default.”
Aviva spokesperson Diane Mangan says: “The ad finished in the summer; it had a schedule and ran its course.
“Overall we are disappointed. The ASA has interpreted many of the facts differently to us.
“We meant 20% more than the customer’s current provider. We are comfortable with out data but respect the ASA’s decision.
“Our overwhelming intention was always to draw attention to one of the most significant financial decisions that people face; that of choosing an annuity.
“More than 40% of customers do not use the open market option to convert their hard-earned cash into retirement income, a problem the government acknowledges and is working with insurers to encourage people to shop around.”
