ASIC acts on insurance direct marketing
The Australian Securities and Investments Commission (ASIC) has told a direct marketing company selling life risk insurance products that it has concerns its telephone sales may have been misleading or likely to mislead consumers.
The ASIC announcement of its concerns about AEGON Direct Marketing Services Australia Pty Ltd (ADMS) has come at the same time as the latest edition of Money Management has raised concerns about an online survey being conducted by Australia Post directing business leads to financial services companies, including insurers.
The Money Management story was prompted by a financial planner receiving what he believed to be unsolicited correspondence suggesting that he had requested documentation relating to a life insurance product.
In similar fashion, ASIC said ADMS had come to its attention in the period between July 2000 and October last year, when customers disputed that they had authorised the purchase of an insurance product. As a result, ASIC reviewed randomly selected recordings of direct marketing calls from the complaints register produced by ADMS.
The regulator said it had thereafter become concerned that the direct marketing calls may have created the impression that customers were being asked to make a decision to purchase the insurance products immediately over the phone and, in certain circumstances, customers were told that they would be sent policy documents so they could review and make a decision whether to purchase during the cooling off period.
ASIC said it also held concerns with telephone sales representatives using the words 'enrol', 'activate', 'start', or 'issue' when referring to the purchase of an insurance product, saying it might not have made it sufficiently clear to consumers that they were purchasing an insurance product.
The regulator said while ADMS believed its marketing practices were compliant with all applicable laws and regulations, it had nevertheless worked with ASIC to address the regulator's concerns.
AUTHOR
Mike Taylor
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