QUESTION 1:

ABC Insurance company run a campaign through television advertisements. The television advertisements depicted a couple in their backyard, with a voiceover saying:

'This is Kiara.This is her hubby Chris. And this is the bite Kiara got in Thailand which will lead to a nasty infection leaving her off work for five weeks. And this is Kiara and Chris's Income Protection Plus that she took out last year just in case something like this happened. It'll keep their bank balance healthy while Kiara's recovering.'

The written representations on the screen stated:

'Illness and injury cover up to 85% of income to $10,000 a month'.

There were also a number of fine print statements at the bottom of the screen, including:

'Waiting periods, payout periods, limitations and exclusions apply'. The product's Product Disclosure Statement specified that claimants would be paid a month in arrears, and only after it had been confirmed that they had been continuously off work for the duration of the applicable waiting period.

Identify if ABC has breached any provisions under the Financial Services Law.

QUESTION 2:

Ms. Rebecca, a software engineer earning $200000 annually, has been dealing with UNO since 2000. She visited the UNO's Clayton branch seeking advice to open a term deposit of $50000 for a period of two years in May 2019. Jacob, a branch staff asked Ms. Rebecca to undertake the '1-25 review' that he can ascertain the scope of advice. Jacob also asked further questions on the purpose and duration of term deposits. Ms. Rebecca informed that her sole purpose of opening the term deposit is to earn 'safe, risk-free and definite' money through higher interest rates. He advised Ms. Rebecca to start UNO Deposit Account and provided her with the term deposit contract which included a term in bold letters, "additional interest rate for customers" which states: "UNO Deposit Account provides an additional interest rate of 2% above the Bank's Base Rate. UNO Bank's current Base Rate is 2%. Closure of term deposit before the maturity date would entail an application of the penalty rate. The penalty rate is defined to be 4%".

Rebecca lost her job during the covid-19 pandemic and closed her term deposit in March 2021 to cover her living expenses. To her absolute dismay, she was not paid any interest for her term deposit owing to the pre-mature closure. When Rebecca questioned the non-payment of interest for 22 months, Jacob showed her the "additional interest rate for customers" term in the contract. Rebecca admitted that she omitted to read the "additional interest rate for customers" term in the contract considering it to be a beneficial term for customers. Rebecca then notified Jacob about the quarterly debits ($2) in her transaction account stating "term deposit account maintenance fee" which was not part of the term deposit contract. Jacob informed that the quarterly debits were due to a system error and Rebecca would not be able to claim a refund since she had failed "Greenwood duty." Advice Rebecca if UNO Bank has breached any provisions of financial services laws.