If they don’t ask, don’t try and sell says AFCA

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”.

Related News:

“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.

Recommended for you



So you want to take on the Marketing and Advertising Industry
No financial ads in the newspaper and no TV ads.....good luck
Or is it ok for the big boys just not smaller self employed businesses to market to their client base.
Totally agree with direct telephone marketing..get rid of it.
But you must be allowed to market your business or that is a restraint of trade

Imagine if doctors and pharmacists were told they couldn't recommend a product unless the patient asked for it! How the hell do they know what they need? That's why they are seeking advice. I'm all for a ban on product manufacturers selling product and using financial planners for sales and customer retention, such as industry funds, banks and insurance companies; but we need to be careful because if these rules are applied to independent and non-aligned financial planners, it will be impossible for them to act in their clients best interests.

I think my online name says it all. Well done LNP , you let them in the door. The fifth column.

I think from the comments people may be miss-reading this proposal which is "unsolicited sales". It does not prohibit marking or sales where a customer has requested contact. For example where a customer has provided a phone number or email address for contact. What is stops is customers being cold called or hounded online when they have not chosen to be.
This is good news for customers and advisers. Most of the direct junk insurance sellers won't be able to survive without their cold calling and dodgy sales practices and at least 3 or 4 have already pulled out of the market. Watch more follow.
Advisers will become a lot more important to manufacturers and they had better get used to it and start working with them instead of against them.

Yes but ...."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."

I like the heading "If they dont ask, dont try and sell" Even if they ask or if they have a level of cover they want to be implemented you cant act unless having them fill a detailed Fact Find and then producing a SoA which most dont read anyway. Im interested to understand if the term under insured means anything to AFCA.
This on top of super funds cancelling cover due to inactivity all points to severe financial hardship at times when people are most vulnerable.

Is AFCA a government authority that fills an Ombudsman role or is yet another Left wing activist group? It is clearly the latter.

What is the situation in relation to an unsolicited letter that introduces your business and the services it provides.?
Are you then allowed to follow up that letter with a phone call to firstly confirm if the letter has been received and secondly to ascertain if they may be interested in the services your business may provide ?
Or, can you send the unsolicited letter and then not be allowed to contact the recipient to discuss any matters at all as you must wait until they contact you?
This is not a request to sell anything.
It's a promotion of your services.
So, if the recipient of the letter had not contacted your business first and requested information or a meeting, where does that leave the ability for the financial services business to market itself to its target market ?
Law firms constantly place NO WIN NO PAY compensation ads on all forms of media opening with a line like
" have you recently been in an accident or lost your job through injury"
Is this ok for Law firms to do this but not financial services businesses ?
This is blatantly the law firm selling their services but its not ok for a financial services business to market to a potential client.?
If so, this has just got a whole lot more crazier than I have ever would have imagined.

Are you still allowed to sell yourself ?....or is that going to be prohibited soon too !
We must lie in wait in our office in darkness.
Do not go outside and let people know what you do and how you do it.
You must wait....and if they don't turn up asking for you, then too bad.

Sometimes, client don't ask for a product but it is relevent in course of providing general financial advice a product option is discussed. This blanket ban, will result im detrimental effect on client. when providing general advice on superannuation insurance is relevant and advisor should check with client if they would like to discuss insurance..

So I must not give out anymore business cards, and when at the weekend BBQ someone asks what I do for a living I must reply "that's classified."
Thanks government.

That's right.
If they ask you for a sausage or a beer that's ok.
If they ask you for an appointment on Mon that's ok.
If they don't ask anything then you must not tell them about some of the products you work with as it may be construed as subliminal messaging and sales promotion versus advice.
If they ask..."I don't have any Income Protection Insurance.....tell me about it and do you think I may need it".
Clam up immediately because even though they have asked you, it can be constituted as advice the minute you open your mouth.
It puts us all in a completely ridiculous position and whilst anyone would suggest making a formal appointment to discuss these types of matters, the restrictions are becoming ludicrous.

First Query for all new clients. "Tell me about yourself and your background and employment?" Depending on the answers some clients get the more detailed questionnaires in order to satisfy the anti-money laundering and terrorism act. I have to check them out as a "politically exposed person" in more detail before I consider they are genuine????

Time to put the pressure on to have these activists to be removed or have these organisations shut down and start again. I know my online name prompts ridicule from the likes of Hedware but I have record of an AFCA Board Member backing a self described Marxist Campaigner.

Add new comment