In October 2017 Consumer Action Law Centre (Vic) coordinated a joint submission to the Australian Securities and Investment Commission’s (ASIC) proposal to mandate a delayed sales model for add-on insurance and warranties sold through car yards. Consumer Credit Legal Service (WA) Inc. along with Financial Rights Legal Centre, Consumer Credit Law Centre SA and Choice, contributed to the submission.
The submission outlines the organisations’ long held concerns about the sale of add-on insurance and warranties in car yards evidenced through multiple ASIC reports, as well as the organisations’ own casework and Consumer Action’s DemandARefund.com website.
The submission sets out the recommendations which are based on a number of principles that should inform the design of a final deferred sales model. These include:
- The decision to purchase and finance a vehicle must be distinct from the decision to purchase and/or finance an add-on insurance product
- Sale of add-on in insurance should take place only after the vehicle has been purchased, finance is approved, and the vehicle delivered
- Customers should have useful product information regarding an add-on insurance product and have engaged with it before the deferral period starts
- Customers should also know the total cost of add-on insurance before a deferral period starts
The principles have led to the submission proposing an alternative sales sequence which would see the deferral period commence when the car had been delivered.
The submission states that the industry has had many years and many prompts to improve their own practices, but their efforts to date have been insufficient. The submission makes it clear that it is now the role of ASIC to protect customers. You can read the full submission here.
If you require legal advice in relation to the purchase of a motor vehicle, please call our telephone advice line on (08) 9221 7066 for a free confidential discussion. The advice line is open between 9am and 4pm Monday to Friday (excluding public holidays).
CCLSWA contributes to ASIC review of add-on Insurance and warranties in car yards
In October 2017 Consumer Action Law Centre (Vic) coordinated a joint submission to the Australian Securities and Investment Commission’s (ASIC) proposal to mandate a delayed sales model for add-on insurance and warranties sold through car yards. Consumer Credit Legal Service (WA) Inc. along with Financial Rights Legal Centre, Consumer Credit Law Centre SA and Choice, contributed to the submission.
The submission outlines the organisations’ long held concerns about the sale of add-on insurance and warranties in car yards evidenced through multiple ASIC reports, as well as the organisations’ own casework and Consumer Action’s DemandARefund.com website.
The submission sets out the recommendations which are based on a number of principles that should inform the design of a final deferred sales model. These include:
- The decision to purchase and finance a vehicle must be distinct from the decision to purchase and/or finance an add-on insurance product
- Sale of add-on in insurance should take place only after the vehicle has been purchased, finance is approved, and the vehicle delivered
- Customers should have useful product information regarding an add-on insurance product and have engaged with it before the deferral period starts
- Customers should also know the total cost of add-on insurance before a deferral period starts
The principles have led to the submission proposing an alternative sales sequence which would see the deferral period commence when the car had been delivered.
The submission states that the industry has had many years and many prompts to improve their own practices, but their efforts to date have been insufficient. The submission makes it clear that it is now the role of ASIC to protect customers. You can read the full submission here.
If you require legal advice in relation to the purchase of a motor vehicle, please call our telephone advice line on (08) 9221 7066 for a free confidential discussion. The advice line is open between 9am and 4pm Monday to Friday (excluding public holidays).