Home / Regulatory & Government / Hawking crackdown shouldn’t prevent 'useful discussions': ICA
23 September 2019
Calls from the Australian Financial Complaints Authority (AFCA) for a ban on all unsolicited sales of financial products have sparked a response on hawking reform from the Insurance Council of Australia (ICA).
The Australian Securities and Investments Commission (ASIC) launched a consultation in July on a proposed ban of unsolicited telephone sales of direct life and consumer credit insurance (CCI).
In its submission AFCA backs the plan, but recommends it go much further.
“AFCA strongly believes that the proposal to ban the unsolicited telephone sales of direct life insurance and CCI should be extended to all methods of unsolicited contact and apply to all financial products,” it says.
ICA says it “accepts the need to prevent a recurrence of the mis-selling shown in royal commission case studies”.
But spokesman Campbell Fuller told insuranceNEWS.com.au tightening the existing ban on hawking “should not prevent banks and insurers having discussions with consumers about their insurance needs that the consumer might find useful”.
“For instance, suggesting the need for home insurance if someone is applying for a home loan.
“Discussions with ASIC have focused on products the consumer would be expecting and be prepared to discuss.”
AFCA’s submission suggests firms should not be allowed to sell financial products unless the consumer initiates contact, and says those which engage in unsolicited sales are not “acting reasonably and in good faith”.
In support of ASIC’s proposals, AFCA says life insurance products are complex and unsolicited sales tactics do not give consumers the chance to give them “genuine consideration”.
It says CCI products offer “little to no value for consumers” and consumers are often unable to make a claim under their policy.
ASIC says further consultation will take place before a final decision in March next year.