Direct sales of life policies via outbound “cold calls” is viewed as unlawful by the Financial Services Council (FSC), the industry body’s chief executive, Sally Loane told the Royal Commission into Misconduct in the Banking and Financial Services Industry on Friday.
Loane admitted to Senior Counsel Assisting the Commission, Rowena Orr QC, that while direct sales of life insurance products was legitimatised “when done correctly,” when pressure selling tactics were involved, as well as inadequate “cooling off” periods, it was not a good product.
“I think given some of the things that have been found and given the things we are now putting into our code [the Life Insurance Code of Practice], it still can be a reasonable and legitimate product,” Loane said.
Loane also told Orr that while the FSC did not have a fully formed view on whether direct sales of life insurance should continue to be made by outbound phone calls, Loane said the industry body certainly had a view on “cold calling,” which was that the FSC viewed the practice as unlawful.
“What I understand is that cold calling is unlawful, pressure selling is a very poor instrument and should not be allowed,” Loane told the Commission.
However, Loane said that given the “right boundaries,” outbound calling “may be legitimate”.
To which Orr responded: “What needs to be done by the Financial Services Council to ensure that it’s legitimate?”
“Well, that’s what we’re addressing in our code,” Loane said.