The hawking prohibitions aim to prevent pressure selling of financial products to consumers and prevent certain marketing techniques that may detract from a consumers decision making process. Credit products will not be regulated under this new anti-hawking law; however, insurance products such as life (disability and injury) and general (home and contents).
These prohibitions state that a person must not
- offer a financial product for issue or sale to another person (a consumer) or
- request or invite another person to ask, apply or purchase a financial product
where the offer, request or invitation is made during, or because of, unsolicited contact with that person.
What does this mean?
Insurance providers are prohibited from offering financial products to consumers during unsolicited meetings or phone calls.
Insurance providers will now need the express consent of the customer prior to you referring them on.
The consent is only valid for six weeks from the date it was given and may be withdrawn at any time by the consumer; and there is a statutory right for the consumer to return a product if they have been hawked that product.
What is unsolicited contact?
Unsolicited contact is any contact in relation to a financial product where the consumer did not consent, that is made by telephone, in face-to-face meetings or any other real time interaction
Contact is not unsolicited if:
(a) the consumer’s consent is provided before the contact is initiated; and
(b) the subsequent offer in relation to a financial product is reasonably within the scope of the consumer’s consent
For a consumer to ‘consent’ to contact, they must make a positive, voluntary, and clear request to be contacted about the financial product.
For more information on the hawking prohibitions refer to ASICs RG 38 click here here