Financial Counselling Australia welcomes the implementation of a ban on unsolicited telephone sales of life insurance and consumer credit insurance sold without personal advice.
ASIC announced today that the ban will come into effect on January 13, 2020.
In the experience of financial counsellors, who work with people in financial hardship, unsolicited telephone selling targets vulnerable consumers. The policies can offer little value – the terms and conditions make it difficult to claim; and vulnerable people simply cannot afford the policies.
Moreover, such selling is driven by the sellers to meet targets rather than because people actually need such insurance cover. Most Australians have life insurance through their group policies in their superannuation.
Financial counsellors often have to spend months getting people out of insurance policies that they did not need or want but were talked into.
In the words of banking royal commissioner Kenneth Hayne in his Final Report, hawking allows “the fraudulent or unscrupulous to prey upon the unsuspecting”.
Fiona Guthrie, the CEO of Financial Counselling Australia, said: “The banning of unsolicited sales of some insurance products by ASIC is welcome. The ban is a necessary protection to protect people from being talked into insurance that they don’t need or want.”
Just last month the Commonwealth Bank pleaded guilty to 87 criminal charges of hawking life insurance through unsolicited phone calls. CommInsure will have to repay 30,000 customers $12 million over its criminal marketing of life insurance.
Fiona Guthrie, the CEO of Financial Counselling Australia, 0402 426 835