ASIC releases details on hawking reforms: ‘Consumer needs will be central’

The corporate regulator released the details on Thursday which state that “a person must not offer a financial product to a retail client in the course of or because of unsolicited, real-time contact” and that “a consumer must consent to being contacted, and that consent must be positive, voluntary and clear”.

“These changes put in place fairness protections, so consumers are not sold products they don’t want or don’t need. The restrictions mean consumer needs will be central to how firms offer products,” ASIC deputy chair Karen Chester said.

“The new hawking prohibition addresses 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.

“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.”

ASIC has taken on feedback from industry stakeholders on the reforms since July, ahead of the 5 October start date.

“The reforms introduced by the government mean that consumers will be able to control how and when they are offered products, rather than being caught unawares or feeling pressured to make quick decisions,” Ms Chester said.

“Under the new laws, ASIC will be better able to tackle poor conduct by firms where consumers are pressured into products that are not right for them.”

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Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.