ASIC highlights consumer credit insurance problems

The Australian Securities and Investments Commission has told financial institutions selling consumer credit insurance that it wants better product disclosure, a more transparent sales process and a more thorough response to complaints.

In a report released yesterday, it said there were problems in a number of areas:

“Some of these complaints include accusations that consumers were sold CCI products without their knowledge or consent, that pressure tactics and harassment were used to get sales, that misleading representations were made.”

ASIC said another problem was that a large number of consumer credit insurance claims were denied. Thirteen per cent of claims on CCI products were denied compared with two per cent of all general personal insurance claims.

Source: Banking Day