The FSA says it reviewed a sample of 43 firms to look at their sales process, systems and controls and whether they were treating their customers fairly when selling GI over the telephone.
It found although general standards were acceptable, standards of sales were poor when insurance policies- such as personal accident insurance, health cash plans and accident and sickness insurance- were sold my phone.
It says the main weaknesses were found in training programmes, supervision of staff and a lack of management information other than for sales and call volumes.
FSA director of retail themes Vernon Everitt says: “The quality of cold calling in general insurance sales was disappointing – consumers were pressurised and the benefits of the product were sometimes exaggerated. 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.”