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Cold call insurance firms provide ‘poor’ patter for punters

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25/04/2007

The Financial Services Authority (FSA) has warned insurance companies that the standard of their cold calling is often “poor” and “unsatisfactory”, and that customers are not being treated fairly in many instances.

After a survey of the way 43 firms sold policies on the phone, the FSA concluded that bad practice was often in evidence and that customers were being pressurised into buying inappropriate and expensive products.

“The quality of cold calling in the insurance sales arena was disappointing,” said Vernon Everitt of the FSA. “Consumers were pressurised and the benefits of the products they were being sold were often exaggerated.”

He continued: “The bottom line is that firms must never pressurise consumers into making a rushed decision, and they must always clearly spell out the nature and limitation of their products, so that the customer knows exactly what they are getting.”

Since September 2006, the FSA has been examining the way insurance companies sell their policies over the phone. It sent questionnaires were sent to 43 firms, listened in to 260 calls made by the sales staff at 19 of them and visited 10 of the firms in person.

The main failings were evident when salespeople called potential customers for cover such as personal accident, health and sickness insurance.

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