Cold call sales of direct life insurance consumer credit insurance banned
The Australian Securities and Investments Commission (ASIC) has announced the implementation of a ban on unsolicited ‘cold call’ telephone sales of direct life insurance and consumer credit insurance (CCI).
The ban is in line with the recommendations made by RLC’s credit and debt team to ASIC Consultation Paper 317.
"This ban is a huge win for our clients," said RLC's credit and debit solicitor, David Hofierka. "We would like to see the scope of this ban widened to prevent unsolicited sales of all forms of insurance including funeral insurance and add-on insurance products.
"High-pressure selling of products such as life insurance, funeral insurance and consumer credit is often deliberately targeted at people experiencing disadvantage, and RLC assists many people with credit and debt issues as a result of unfair sales practices."
RLC’s Health Justice Partnership (HJP) solicitor, Brian Attard agrees.
“Our HJP service assists people in the health system experiencing vulnerability, many of whom are more likely to have increased anxieties around illness and dying," Attard said.
"It is not uncommon for our clients to be targeted by sales reps selling funeral insurance they cannot afford and don’t really need, particularly to people within Aboriginal and Torres Strait islander communities."
The ban complements enforcement action ASIC has undertaken for past poor sales conduct by insurers. ASIC has also taken action against a number of firms where we identified misselling or inappropriate conduct in the sale of direct life insurance and CCI.
In announcing the ban, ASIC Commissioner Sean Hughes said, "ASIC will intervene to stop practices that lead to poor consumer outcomes and destroy trust in the financial system.
"This action draws a clear line in the sand. From January, firms will no longer be able to call consumers out of the blue and use sophisticated sales tactics to pressure people into buying life insurance and CCI products," Hughes said.
RLC will continue to advocate for a ban that extends to unsolicited sales of all forms of insurance and add-on products.
Source: ASIC Media Release (4 December 2019)