ASIC bans cold-calling telephone sales of life, funeral and consumer credit insurances
As the Australian Securities and Investments Commission (ASIC) bans life insurance and consumer credit insurance (CCI) providers from flogging products via outbound telephone sales, Consumer Action Law Centre (Consumer Action) emphasises the need for an economy-wide ban on unsolicited sales practices.
The ban comes just one week after the Federal Court’s sentencing of CommInsure for breaches of ‘anti-hawking’ laws.
Senior Policy Officer at Consumer Action Cat Newton applauds ASIC for taking decisive action to protect Australians against exploitative sales tactics.
“Insurance companies have been earning a quick buck at people’s expense by taking advantage of loopholes in current anti-hawking laws for too long,” says Newton.
While encouraged that people will no longer face cold-calls about life and funeral insurance when the ban takes effect on 13 January 2020, Newton emphasises that an economy-wide ban on all forms of unsolicited selling is still necessary to create a fair consumer marketplace.
“Consumer advocates across the country have witnessed the damage caused by this outdated practice across various sectors—we still receive complaints of unsolicited calls and home visits,” she says. “Unfortunately, companies that use unscrupulous sales practices often target our community’s most vulnerable.”
Consumer Action urges the Federal Government to ban unsolicited selling across all goods and services to align with the key recommendation made during the Hayne Royal Commission.
“Restricting the ban on unsolicited sales practices to just the insurance industry only scrapes the surface of a much larger problem,” says Newton. “It’s too easy for companies using clever tactics to exploit loopholes in the anti-hawking laws to flog low value products that people don’t want or need. It’s not just cold-calling, there are ongoing problems with unsolicited online contact, emails, letters, door-knocking, and cross-selling products to existing customers.
“From worthless timeshare to funeral insurance to loans for the purchase of solar panels, unsolicited sales practices are having a real detrimental impact on Australians economy-wide.
“We can’t let banks, insurers and other businesses use purchased marketing lists and tricky consent tactics to pressure people into worthless products,” says Newton.
“ASIC’s cold-calling ban is a good interim step. Now we need the Government to ban harmful unsolicited selling practices economy-wide.”
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