Is there anybody there?
MORTGAGE SOLUTIONS - 8TH MAY 2007
Financial services companies who make cold-calling part of their business strategy cause Simon Burgess to break out in a cold sweat.
The recent round of European Cup semi-finals, reminded me of a friend’s experience during last year’s Word Cup final. Sitting at home with a couple of friends, everything was in place. Some beers were in the fridge chilling, snacks were in ready supply and all disinterested parties had been asked to vacate the premises to ensure there would be no interruptions to the big game. As France and Italy trotted out to compete against each other in a spectacle that must be one of the biggest events in world sport, all eyes were glued to the screen.
Twenty minutes into the first half, the phone rang and my friend’s first mistake was to pick it up. What, after all, could be more important than the drama unfolding in front of him? Incredulously, he listened as a salesman from a leading financial provider asked if he had considered switching credit cards, and what deal he happened to be on at the moment. The response was sharp, swift and certainly unprintable, but the anger it generated simmered for months and still comes to the boil when the incident comes up in conversation.
What on earth was a financial provider doing calling people during an event that takes place only once every four years and holds a passion bordering on obsession for millions of people?
What is so incredible is the utter lack of thought that clearly went into the timing of such a sales call. It would be fantastic to see just how many sales were actually made during the game and contrast it to the wrath endured by call centre workers in the most difficult of circumstances. Almost a year later, cold-calling is still a thorn in the side of many consumers who feel it is an invasion of their personal space, often during the evening when they are relaxing with family or friends.
The FSA recently issued the findings of initial research into the cold-call selling of general insurance, and high-lighted problems that particularly exist in regard to personal accident insurance, health cash plans and accident and sickness policies.
Cold-calling at this level is akin to firing huge cannon loads of shot over the market, hoping that eventually enough people are hit to make it profitable. It is a base approach to selling that fails to target consumers in any meaningful way, not matter how much providers claim that the databases and systems they use are tailored to throw up suitable clients.
People are called repeatedly, consumers are pressurised in their own homes and it is difficult for potential buyers to get a real idea of exactly what they are being offered and how it will work for them.
Setting the standard
Cold-calling is outlawed for mortgages and the majority of investment products, although the FSA has not yet ruled it out for general insurance.
At the moment, it says there are no plans to bring down the axe on the insurance sector, although it has emphasised the sanctions which firms will face if they are seen to be using an inappropriate cold-calling strategy. Such sanctions could see firms facing a suspension of sales until deficiencies have been rectified, or reviews carried out into rejected claims. The regulator may also insist on an agreement to assess future claims on the basis of what customers were actually told at the point of sale, in cases where the sales person did not follow the sales script.
Unless cold-calling is policed strictly and effectively, it has the potential to cause significant detriment to consumers and damage the reputation of the insurance industry. Neither of these outcomes is welcome. In the meantime, the advice to all consumers is not to be pressurised into buying anything that they are uncomfortable with, and for those sitting down to watch the closing stages of the European Cup, they could do worse than taking the phone of the hook.
Simon Burgess is managing director of British Insurance.
