All financial products should be the subject of a ban on unsolicited sales, not just telephone sales, according to the Australian Financial Complaints Authority (AFCA).
In a submission responding to the Australian Securities and Investments Commission (ASIC) consultation paper dealing with unsolicited telephone sales of direct life insurance and consumer credit insurance, the AFCA urged an extension to all financial products.
It said the proposal to ban the unsolicited telephone sales of direct life insurance and consumer credit insurance (CCI) should be extended to all methods of unsolicited contact “an apply to all financial products”.
“We consider that unsolicited contact creates an uneven relationship which favours the financial firm,” the AFCA submission said. “It significantly increases the vulnerability of consumers and exposes them to potential exploitation by the financial firm.”
The AFCA submission said that it welcomed the proposed ban on unsolicited telephone sales and added: “We consider the proposal should go further to prohibit unsolicited sales altogether of any financial product to consumers”.
It described ASIC’ proposed ban on unsolicited telephone sales as “a starting point to protecting consumers against predatory sales tactics and being sold unsuitable and inappropriate financial products”.
“We note that the proposal only captures unsolicited telephone sales made when general advice or no advice is given. We believe that the proposal should go further and prohibit all unsolicited attempts to sell to a consumer, not just telephone sales, and this should apply to all financial products.”
“We consider that a financial firm should not be permitted to attempt to sell a consumer a financial product if that consumer has not taken positive action to enquire about the product or initiate the contact,” the submission said.