The FSA has said firms must improve the standards of cold calling when selling general 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 when selling general insurance over the telephone.
The review found that the standard of sales where the customer called the firm was generally acceptable, although the disclosure of significant exclusions and limitations could be improved. The standard of sales, however, was poor when insurance policies, such as personal accident insurance, health cash plans and accident and sickness insurance, were sold through 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.
Vernon Everitt, Director of Retail Themes at the FSA, commented : "We expect to see significant improvements when consumers are cold called. 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 nature and limitations of the products.
