FSA warns insurers to improve cold calling standards
by Joanne Payne Brand Republic 26-Apr-07, 10:00
LONDON – The Financial Services Authority has said that firms must improve the standards of cold calling when selling general insurance over the telephone to ensure they are treating their customers fairly.
The FSA has reviewed a sample of 43 firms to look at their sales process, systems and controls and whether they were treating customers fairly when selling services by telephone. The review found that the general standard of sales was acceptable, although disclosure of significant exclusions and limitations could be improved.
However, the FSA found that the standard of sales was poor when insurance policies such as personal accident insurance health cash plans and accident and sickness insurance were sold through cold calling.
The main weaknesses were found in training programmes, supervision of staff and a lack of management information other than for sales and call volumes.
Vernon Everitt, director of retail themes at the FSA, said: “The quality of cold calling in general insurance was disappointing — consumers were pressurised and the benefits of the product were sometimes exaggerated.
“We expect to see significant improvements when consumers are cold called. Swift action has been taken to deliver these improvements at the firms we visited and we are following up with other firms which use cold calling as part of their sales strategy.”
Such action included: voluntary suspension of sales until deficiencies have been rectified; reviews of rejected claims to ensure that they had not been rejected where the customer may have been led to believe that they were properly covered and; agreement to assess future claims on the basis of what customers were actually told at the point of sale in cases where the sales person did not follow the sales script.
