Effective January 13, the Australian Securities and Investments Commission (ASIC) will ban all unsolicited “cold call” telephone sales of direct life insurance and consumer credit insurance (CCI).
The ASIC announcement comes after a July consultation on the ban of cold-call sales of the two insurance products, and less than a week after CommInsure was fined $700,000 for 87 charges of hawking offences.
ASIC said the move seeks to address poor sales practices that have led to unfair consumer outcomes and is consistent with recommendations made by the financial services royal commission. To reflect the ban, an updated guidance of hawking provisions was also released by ASIC.
“ASIC will intervene to stop practices that lead to poor consumer outcomes and destroy trust in the financial system,” said Sean Hughes, ASIC commissioner. “This 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.”
