CommBank criminal charges reinforces need for urgent law reform
The Banking Royal Commission exposed the considerable harm caused by unsolicited selling of insurance products. Today one of Australia’s big four banks has been charged with 87 criminal counts of “hawking” insurance over the phone.
Hawking, otherwise known as unsolicited selling, is an outdated practice that is proven to cause harm to Australians who are pressured into purchasing low-value products that they don’t want or need.
Consumer Action Law Centre has long-been calling for an economy-wide ban on this detrimental practice to protect people from high-pressure sales tactics.
“People are being cold-called by companies seeking to force the sale of products which are complex, unsuitable, or even worthless. Cold-calling is a lazy cash cow for the insurance industry and vulnerable Australians are often the primary target of these unscrupulous practices. It’s unethical, it’s wrong and it needs to stop urgently,” says Consumer Action CEO Gerard Brody.
The criminal charges announced by ASIC today against the Commonwealth Bank of Australia’s life insurance arm, CommInsure, underscores that existing laws are not enough to stop these poor practices.
“It’s great to see the corporate cop prosecute breaches of the law, but today serves as a reminder that our existing laws don’t go far enough – they don’t apply to all insurance products, and it’s too easy to exploit loopholes,” says Brody.
“Commissioner Hayne recommended a clear and comprehensive ban on hawking of insurance products to prevent this harm. We welcome the government’s commitment to implement this recommendation, and in light of today’s criminal charges the Morrison Government must urgently legislate to put an end to the unsolicited sales of all financial products.
“A ban on unsolicited selling should actually go across all goods and services—we shouldn’t be harassed by companies calling to sell us stuff we haven’t asked for”, he said.
Royal Commission Final Report recommended a simple and clear ban on the unsolicited selling of all insurance (Recommendation 4.1) and Consumer Action urges that this be swiftly implemented.
MEDIA CONTACT: 0413 299 567, media@consumeraction.org.au.
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