ASIC concerned some telephone sales of life insurance products may have been misleading

/, Insurers, Life Insurance/ASIC concerned some telephone sales of life insurance products may have been misleading

ASIC has published details of its concern with AEGON Direct Marketing Services Australia Pty Ltd (ADMS) that some telephone sales of life risk insurance products may have been misleading, or likely to mislead consumers.

ASIC was concerned that the direct marketing calls may have created the impression that customers were not being asked to make a decision to purchase the insurance product immediately over the phone and in certain circumstances, customers were told that they would be sent policy documents so that they could review and make a decision whether to purchase during the cooling-off period.

ASIC also had concerns with telephone sales representatives using the words ‘enrol’, ‘activate’, ‘start’, or ‘issue’ when referring to purchase of an insurance product which may not have made it sufficiently clear to consumers that they were purchasing insurance products.

In response, ADMS has implemented, or is in the process of implementing, a number of changes to its calling script. Some of the changes include the following:

  • The word ‘enrol’ has been replaced by ‘purchase’.
  • The removal of the phrase, ‘you don’t have to make a decision today’.
  • The customer is asked to confirm their understanding that they are ‘purchasing’ an insurance product.
  • The provision of an expanded general advice warning towards the start of the direct marketing call.
  • Overall, more wording has been made mandatory for telephone sales representatives to follow.

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