Mercury Insurance Billboard Sparks Controversy

The controversy over the Los Angeles billboard telling the public “You Can’t Trust Mercury Insurance” could soon become a lawsuit.

Attorneys for Consumer Watchdog, the group that put up the message, have sent a letter to CBS Outdoor, Inc., the billboard owner, threatening legal action to force them to restore the sign if the company does not do it by themselves.

For two weeks at the end of August, the billboard with the black writing on a bright yellow background exhorted drivers on Wilshire Boulevard with its statement “Consumer Watchdog says: ‘You Can’t Trust Mercury Insurance'” and directed them to a website where Consumer Watchdog had posted its “Top 10 reasons why you cannot trust Mercury Insurance Co.”

The billboard was strategically placed. It was on top of a building, above a spray of palm tree crowns, and, as the Los Angeles Times noted, it was just one half mile from Mercury’s headquarters. Consumer Watchdog is also located in Los Angeles.

Then suddenly, on Sept. 3, the billboard was gone, replaced by an advertisement for the National Guard, even though Consumer Watchdog had paid $3,000 for the message to run until Sept. 20.

Consumer Watchdog spokesman Douglas Heller says his group had no warning and was not even told when the sign went down. He says CBS approved the message or it never would have gone up, and that CBS is now in violation of its contract.

“You don’t interfere with a nonprofit’s right to inform the public,” Heller says.

Consumer Watchdog says CBS caved in to pressure from Mercury, which threatened CBS if it did not remove the “defamatory statements.” CBS Outdoor has said it has no comment on the situation. Calls from the Insurance Journal to Mercury’s advertising director, Erik Thompson, were not returned.

In a statement released at the time of the removal, Mercury said: “CBS apparently has considered our comments and, as a responsible organization, has removed the defamatory statements from their billboard. Consumer Watchdog’s claims about Mercury Insurance and its motivation are without merit.”

Taking down the billboard may only have expanded its reach, however. The newswire service Reuters picked up a press release from Consumer Watchdog about the removal. The Huffington Post website has run a statement on the controversy by Consumer Watchdog President Jamie Court. And, the Los Angeles Times not only covered the story, but it has been followed up by the newspaper’s columnist Steve Lopez. Lopez wrote a column saying he thought it was ridiculous that the Mercury billboard statement was quashed while a few blocks away an advertisement on the side of a building for Absolut Vodka has a picture design that resembles a vagina, and no one complains.

Consumer Watchdog has a history of criticizing insurance companies. The founder of Consumer Watchdog, Harvey Rosenfield, wrote Proposition 103, the measure passed by California voters in 1988 that gave the state insurance commissioner the power to approve property and casualty rates, and disallowed the use of ZIP codes in establishing a rate for automobile insurance.

Heller says Mercury was targeted this time because it “is a standout with regard to bad behavior.”

Mercury is the third largest provider of automobile insurance and the ninth largest provider of property insurance in California.

In its top 10 reasons treatise, Consumer Watchdog says Florida censured Mercury for its handling of hurricane claims in 2006, determining, among other things, that Mercury failed to give reasons for denying claims, failed to pay full claims, and discontinued coverage in an “unwarranted” fashion when policy holders filed claims.

The treatise also alleges that California officials recently called Mercury contemptuous and abusive of customers, in an administrative law case, and that Mercury had a training guide for claims staff that directed them to low-ball claims offers, to put people off, and to “remind claimants that a judge or jury would find them at comparative fault.”

Consumer Watchdog also says that Mercury is unduly aggressive in its efforts to influence public policy, and has donated more to political campaigns than any of the other four largest automobile insurance companies.

Heller says Consumer Watchdog intends to meet with its lawyers this week to decide on their specific course of action should CBS not restore the billboard.

The letter sent to CBS says: “Should you fail to do so, we will promptly file a cause of action seeking declaratory and injunctive relief requiring that CBS repost the billboard for the balance of the contractual term.”