The regulator’s concerns arose following a review of a sample 43 firms, which looked at sales processes, systems, and controls and whether they were treating customers fairly when selling GI over the telephone.
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While the standard was generally acceptable when the customer called the firm, the FSA discovered the standard of sales was poor when insurance policies, such as personal accident insurance, health cash plans and accident and sickness insurance, were sold via 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.
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Vernon Everitt, director of retail themes at the FSA, said: “The quality of cold-calling in GI sales was disappointing – consumers were pressurised and the benefits of the product were sometimes exaggerated. We expect to see significant improvements.
“Swift action has been taken to deliver those improvements at the firms we visited and we are following up with other firms which use cold-calling as part of their sales strategy. The bottom line is that firms must never pressurise consumers into making a rushed decision and must always clearly spell out the limitations of the products.”
Steve Radford, PR manager for the Chartered Insurance Institute, said: “No matter who carries out these activities, they need to be competent.”
