BOSTON Liberty Mutual was ordered today to halt a direct-marketing campaign and pay back drivers who may have lost money from what Massachusetts Attorney General Martha Coakley called the company's "allegedly misleading" fliers.
Coakley said the ads 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 Tuesday 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 were 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 statement. "All insurers have a responsibility to make their advertising clear and accurate."
Liberty Mutual issued this response: "It's a shame that 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. We have not received a single complaint from a Liberty Mutual customer. We expressly deny any wrongdoing. However, we have agreed to change the marketing materials and language in question in Massachusetts."
Coakley said more than 1,600 drivers bought new insurance from Liberty Mutual because of the promotions advertised on the mailers.
The 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.
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