Covid 19 coronavirus: FMA clamps down on misleading insurance ads

Misleading claims were posted onto the WeChat app. Photo / Getty Images

The Financial Markets Authority (FMA) is clamping down on fear-mongering insurance ads tapping into public concerns about Covid-19.

Last week, the FMA successfully requested the removal of two advertorials a financial adviser had posted on Chinese-language social media app WeChat.

The ads warned users that hospitalisation for Covid-19 could cost up to $250,000 in China and people living in New Zealand should get health insurance to avoid the financial risk.

What the posts did not mention was that emergency treatment and testing for Covid-19 is covered by the public health system in New Zealand.

The Ministry of Health says anyone with an infectious disease is eligible for publicly-funded health services. Citizenship and immigration status are not relevant, nor is their length of stay in New Zealand.

The FMA was alerted to the misleading ads by a concerned party, who had seen the ads online.

FMA director of regulation, Liam Mason said whether intentional or not, the posts would have misled readers into believing they needed insurance for Covid-19 testing and urgent treatment, when they do not.

"All advisers, in particular registered financial advisers, need to remember their fair-dealing obligations under the Financial Markets Conduct Act. These provisions prohibit misleading or deceptive conduct, including false or misleading advertisements," Mason said.

"The FMA will not tolerate behaviour from firms or individuals that appears to exploit the Covid-19 disruption or conduct that preys on people who may be feeling additional stress at this time. We will take any steps necessary to stop this kind of behaviour and hold those responsible to account."