The Australian Securities and Investments Commission (ASIC) has proposed to ban unsolicited telephone sales of direct life insurance and consumer credit insurance (CCI) to prevent the sale of complex insurance products which consumers do not need, want, or understand.
ASIC released a consultation paper which identified unfair sales practices that were consistently failing consumers and recommended a ban on unsolicited telephone sales of CCI, ahead of a royal commission recommendation which would outlaw unsolicited sales of superannuation and insurance products.
“ASIC will step in to stop practices that lead to poor consumer outcomes and destroy trust in the system,” said Sean Hughes, ASIC commissioner. “It is only fair that consumers have a proper opportunity to consider which insurance product best meets their needs and then compare alternative products, without feeling pressured to make a purchase. Such a ban is consistent with the financial services royal commission recommendations and will provide consumers with further protections from misselling practices now, ahead of wider law reform by government. Without such a ban, we are concerned that consumers will continue to be preyed upon by peddlers of inappropriate insurance products, using pressure sales tactics.”
Submissions are due by Aug. 29.