In the latest scam to hit the financial sector, thousands of Australians have been sold insurance products that they will never be able to claim on or simply don’t need. American-owned company ‘Combined Insurance’ is at the centre of the scandal with whistleblowers reporting that a large number of agents, in order to boost sales, have encouraged customers not to disclose problems or have failed to record them.
Agents who sell insurance still earn commission on every sale and a whistleblower has suggested that the firm’s aggressive sales culture encourages bad practices.
ASIC has launched a major investigation into the practice of Combined Insurance, however, none of the agents caught up in this scandal have been stood down and they are still continuing to sell products.
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Opinion: Beware door-to-door salesmen
In past generations, door-to-door salesmen would offer products or services of great value that you would need or want. As the business world has moved online, the quality of these door-to-door offerings has deteriorated so we now have company salespeople looking to push a very specific product or service of dubious value on to the homeowner.
Many of the reported cases in the current insurance scam occurred when door-to-door salesmen came to the house and were invited inside to talk about the products on offer. The homeowners were then sold into insurance policies on the spot, many being fed false information or being told to not disclose certain medical or financial information that would prevent them receiving insurance.
Generally speaking, irrespective of what’s being pedalled, you should never agree to purchase or sign-up for a service on the spot. Ask the seller to provide you with an information pack so that you can shop around to see if there is a more suitable service or product for your needs.
When was the last time a door-to-door salesman visited? Did they try to persuade you to purchase something you didn’t need? Is the regulator, ASIC, doing enough to protect the consumer?