In the wake of CommInsure’s breaches of anti-hawking laws, Consumer Action Law Centre (Consumer Action) says it’s time to take urgent and decisive action by implementing an economy-wide ban on unsolicited sales practices.
The life insurance arm of Commonwealth Bank, CommInsure, was sentenced to pay a criminal fine of $700,000 today after it pleaded guilty to 87 breaches of anti-hawking laws earlier this month. The company had already agreed to refund some 30,000 customers to the tune of $12 million life insurance product Simple Life they had been hawked via unsolicited phone calls.
Consumer Action is encouraged to see ASIC pursue criminal penalties against companies flouting anti-hawking laws.
“Unsolicited selling is an outdated practice that is proven to cause harm to people. Australians are being pressured and tricked into complex, unsuitable or worthless insurance they don’t want or need.” says Senior Policy Officer, Cat Newton.
“No-one can reasonably assess their insurance needs in a ten-minute phone call you’re not expecting. While anti-hawking laws can help stop insurers from cold-calling people, they can get around these laws via loopholes where they ostensibly get permission to call through a tiny tick box in an unrelated document.
“It’s too easy for companies using clever tactics to exploit loopholes in the anti-hawking laws to flog low value products. It’s not just cold-calling of life insurance, there are ongoing problems with unsolicited online contact, door-knocking and cross-selling.”
She says that Australians experiencing vulnerability are too often the primary target of unscrupulous sales practices.
A key recommendation from the Hayne Royal Commission is a clear and comprehensive ban on all forms of unsolicited selling for all insurance products. Consumer Action is calling for this ban to extend to all goods and services.
“We can’t let banks, insurers and other businesses use purchased marketing lists to pressure people into worthless products,” says Newton.
“Restricting the ban on unsolicited sales practices to just the insurance industry only scrapes the surface of a much larger problem.
“It’s time for the Federal Government to step up to the plate and protect Australians from further financial harm.”
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