Consumers are to be protected against cold calls with the Australian Securities and Investments Commission (ASIC) updating its regulatory guidance on the prohibition of hawking financial products.
Deputy Chair of ASIC, Karen Chester said the anti-hawking reforms, in effect from next week (5 October), flowed from recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“(The reforms) are designed to tackle consumer harms arising from consumers being approached with unwanted products through cold calls or other unsolicited contact,” Ms Chester said.
“Under the prohibition, a person must not offer a financial product to a retail client in the course of or because of unsolicited, real-time contact,” she said.
“A consumer must consent to being contacted and that consent must be positive, voluntary and clear.”
Ms Chester said the changes protected consumers from being sold products they did not want or need and meant that consumer needs would be central to how firms offered products.
The Deputy Chair said the new anti-hawking prohibition addressed long-held concerns about poor consumer outcomes from unsolicited sales of financial products.
“ASIC’s 2018 review of unsolicited life insurance sales calls revealed poor sales conduct and poor consumer outcomes, with 40 per cent of consumers feeling under pressure to buy a product,” she said.
“This led to recent criminal proceedings for the hawking of life insurance and, to date, ASIC has helped secure over $250 million in consumer remediation for consumer credit insurance and life insurance.”
Ms Chester said the reforms would put consumers in control of how and when they were offered products, “rather than being caught unawares or feeling pressured to make quick decisions”.
She said that under the new laws, ASIC would be in a better position to tackle poor conduct by firms where consumers were pressured into products that were not right for them.
ASIC’s 49-page Regulatory Guide 38: The Hawking Prohibition can be accessed at this PS News link.
