The PPP - Consumer Duty

Consumer Duty

Kathryn has hosted a new episode of the Practical Protection Podcast, in which she was joined by Alain Desmier from Contact State. 

They talk about a range of topics, but mainly Alain’s insights into lead generation, consumer consent, data and the thing we are hearing about a lot at the moment, the FCA Consumer Duty Principle.

Alain has been involved in marketing and advertising for around 15 years, and has experience of running two lead generation businesses. Something that became quite apparent to Alain, was fraudulent lead generation and the selling of information. Because of that, he came up with the idea of having data consent and certification. They found that selling data or buying leads can have its downfalls. As an example within the protection insurance industry, they have proved that misleading data consent can lead to a higher policy lapse rate. Alain and his business partner believe it’s important to see the wording of terms and conditions so that people know exactly what they’re consenting to, and this also helps businesses manage their liability too.

Many companies buy leads, but the FCA Consumer Duty Principle will soon require you to have oversight about the leads that are bought. You are expected to know where the leads are coming from and what adverts your clients are seeing which encourages them to give their data in the first place.

Kathryn believes that this is quite a good thing to enforce. Insurers should also have a responsibility to do spot checks. For example, they could give a week’s notice for you to provide information of where your leads are coming from, the processes involved and how you know they’re legitimate. 

Following on from that, Alain thinks that there are a number of insurers who are becoming aware of the issues around lead generation, as some lead generations have caused issues for insurers in certain situations. Insurers and intermediaries are both seeming to get tougher about the source of leads.

As Kathryn is a protection adviser, she shares her thoughts on fast leads, and that they aren’t always exactly what is wanted. Kathryn, and the rest of the advisers at Cura, work on making a rapport with the clients. A fast lead doesn’t often allow time for this, there’s not the memorable conversations that we would expect to take place. Because of that, clients don’t realise that you are offering them an ongoing long-term service.

With the mention of cold calls and fraudulent leads, Kathryn explains a time where this happened to a client of Cura. We have previously arranged life insurance and critical illness cover for a client who had an existing health condition, which made arranging the critical illness cover aspect more difficult than normal. Both policies were in place and after around a year had passed, we began receiving notifications of the policy being cancelled. As we would with any policy, we checked in with the client to make sure all was well. Surprisingly to us, the customer wasn’t too pleased. They had received a phone call, what we now believe to be fraudulent, from a person saying they could provide a like for like policy for less than a third of what they had been paying for the past year. Hearing that, we completely understood why they wouldn’t be too happy, who would want to be paying more than need be? Even if the client didn’t want to deal with us at that time, we encouraged them to check over all of the documents to make sure they were getting exactly what they expected. We did hear back from the client a few days later and they realised that they had been offered terminal illness cover only, and the person over the phone led them to believe that this was the same as full critical illness cover. For those who aren’t familiar, these are very different policies. The client was mortified that they had been duped and very grateful when we got their original policy set back up.

What we believe to have happened is somebody had received their information as a lead and called up on it. But did the client give their consent for that? And would all of that confusion be avoided if consent was needed? Alain shares some insights, one being that there are half a million cold calls each day. Of course, some of these calls might end up being successful, such as the one with our client, who would not fall into the usual categories of being vulnerable to this kind of targeted campaign. It’s not just vulnerable people who can get caught out by these, it can be anybody.

Consent is so important, but this isn’t going to be something which will be resolved overnight. It takes work and commitment from a number of parties, but people such as Alain are working very carefully and seriously to fix it.

Kathryn and Alain both said a number of interesting things throughout this episode. If you want to catch what else was discussed, you can do so below.

Matt Rann is back to join Kathryn for the next episode. They are discussing high cholesterol and the impact that might have on your protection insurance.

Check out the Practical Protection Podcast website to listen to more episodes.

Remember, if you have listened to this as part of your work, you can claim a CPD certificate on the website, thanks to the podcasts sponsors Octo Members.

If you would like to know more about how to arrange protection insurance, take a look at Kathryn’s Protection Insurance in Practice course.

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