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Media release: Time’s up for unsolicited phone sales of direct life insurance and consumer credit insurance

The Financial Rights Legal Centre (Financial Rights) has welcomed the Australian Securities and Investment Commission’s (ASIC’s) announcement that they will consult on banning unsolicited phone sales of direct life insurance and Consumer Credit Insurance (CCI) sales practices.[1]

Unsolicited direct life insurance is sold to consumers by life insurers or their sales partners, by outbound telemarketing or situations where consumers would not expect a sales call. These can include when someone entered a competition or completed a survey, or if they are already a customer of a non-life insurance business, and they didn’t realise that they agreed to terms and conditions that signed them up to receive marketing calls about life insurance.

“This dodgy business model’s time is up,” said Alexandra Kelly, Financial Rights’ Director of Casework. “Unsolicited direct life insurers and their associated partners are the ‘used car salesmen’ of the insurance industry. These businesses trick you into receiving a call and then use high pressure sales tactics to bag a sale. These tactics can include refusing to send out paperwork unless you agree to buy the product first, not explaining the future cost ands exclusions of a product or offering promotional gifts to reel you in. Such tactics are unacceptable and have led to lead to poor consumer decision making. Thousands of Australians have ended up with low value life insurance products and CCI that that they don’t want or need and can’t afford.

“The worst part is that we continue to hear from Australians who have been mis-sold life insurance using these tactics. A ban on these practices cannot come quick enough and we are pleased to see ASIC take on this business model.”

“ASIC and the Banking Royal Commission have collected a mountain of evidence to demonstrate that that the business model is the cause of enormous harm to consumers. We look forward to ASIC implementing this ban sooner rather than later to stop any further exploitation by these dodgy tactics.

[1] ASIC, Consultation Paper 317 Unsolicited telephone sales of direct life insurance and consumer credit insurance July 2019 https://download.asic.gov.au/media/5204017/cp-317-published-18-july-2019.pdf

Contact:


For further information contact Peter Vincent Communications and Campaigns Officer peter.vincent@financialrights.org.au on 02 8204 1372. Alexandra Kelly, Director of Casework, Financial Rights is available for further comment.


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