The Financial Services Authority (FSA) says that firms must improve the standards of cold calling when selling insurance over the telephone to ensure they are treating their customers fairly.
The FSA reviewed a sample of 43 firms to look at their sales process, systems and controls, and whether they were treating customers fairly.
The standard of sales was poor when insurance policies, such as personal accident insurance, health cash plans and accident and sickness insurance, were sold through cold calling.
Vernon Everitt, Director of Retail Themes at the FSA, says: "The quality of cold calling was disappointing as consumers were pressurised and the benefits of the product were sometimes exaggerated. The bottom line is that firms must never pressurise consumers into making a rushed decision and must always clearly spell out the nature and limitations of the products. Our advice to consumers is that if you are cold called, do not feel pressured into making a rushed decision, even where 'free periods' or other incentives are on offer. Step back and take all the time you need to make sure the insurance is right for you."
Commenting on the FSA’s research on insurance sales standards and cold calling, Emma Walker, of price comparison website moneysupermarket.com, says:
“You should always understand exactly what type of insurance you are buying and should never feel pressurised to opt for a product that might not be right for you. You should read the small print, and compare as many policies as possible for both value and cover provided. It is not something that should be taken out on a whim, and if you are looking for cover, it is essential to get the right policy for you.”