Home / Regulatory & Government / ASIC cold calling ban ‘draws line in sand’
9 December 2019
Cold call telephone sales of direct life insurance and consumer credit insurance (CCI) will be banned from the middle of next month.
Announcing the move last week, Australian Securities and Investments Commission (ASIC) Commissioner Sean Hughes said the action “draws a clear line in the sand”.
“From January firms will no longer be able to call consumers out of the blue and use sophisticated sales tactics to pressure people into buying life insurance and CCI products.”
The Hayne royal commission recommended that hawking of all insurance and superannuation products should be prohibited and a legislated definition of “unsolicited” introduced.
The regulator says its ban, which takes effect from January 13, provides greater protection for consumers and complements proposed broader law reform.
“ASIC will intervene to stop practices that lead to poor consumer outcomes and destroy trust in the financial system,” Mr Hughes said.
Under the existing rules firms can engage in unsolicited telephone calls if certain requirements are met, such as giving consumers the option of having product disclosure statement information read out.
CommInsure last month was fined $700,000 after pleading guilty to 87 counts of mis-selling life insurance products over the phone. It separately agreed to refund more than $12 million to around 30,000 customers.
Consumer groups want a stronger crackdown on unsolicited online contact, emails, letters door-knocking and product cross-selling.
“We can’t let banks, insurers and other businesses use purchased marketing lists and tricky consent tactics to pressure people into worthless products,” Consumer Action Law Centre Senior Policy Officer Cat Newton said.
“ASIC’s cold-calling ban is a good interim step. Now we need the Government to ban harmful unsolicited selling practices economy-wide.”