Malaysian consumers are being misled into purchasing products or services incorrectly. At the National Consumers Complaint Centre (NCCC), many people who sought help complained of agents from insurance companies who promised rebates or other benefits that were not valid.
Sales agents have to reach targets set by their companies. To do so, the unethical ones may resort to giving false promises. Upon signing up, victims discover that the promises cannot be fulfilled.
The situation becomes worse when the sales agent who made the false promises has been transferred or has resigned by the time the customer is aware of the issue. Such agents are usually temporary staff who move on after hitting their sales target with one company.
These frustrated customers had to turn to the NCCC for help, as they did not have a written agreement with the agent. Such customers learn that they have to go through a lot of hassle when they want to terminate wrongly bought policies before the policies mature – and, again, they were not informed of such liabilities. The amount of money and time lost is often quite substantial.
From the complaints made to the NCCC, it appears that some agents are generally not well informed about the actual content of the insurance policies and the coverage they are selling. They seemingly only focus on the commission that they will get upon signing up new customers or on achieving sales targets.
Newer agents, especially, do not understand or are unable to explain the content of the policies they sell and what clients are entitled to in case of any emergencies.
According to the NCCC, almost 500 consumers complained last year about issues related to refunds and misleading information given by insincere agents.
Insurance companies should consider conducting training for new agents to ensure they know their products comprehensively. They must make it compulsory for new agents to pass stringent examinations that encompass all issues related to insurance before endorsing people as qualified agents.
These agents should also be tested by senior agents through peer group training or mentoring, whereby the new agents could be exposed to mock simulation situations in which many questions will be put to them by senior agents posing as inquisitive customers.
Insurance companies should also set the rule that all agents must attend refresher courses periodically to enhance their knowledge of the latest policies available in the market.
The issue regarding insurance companies not providing clear descriptions of their products for the benefit of their customers was highlighted by Datuk Dr Paul Selvaraj, CEO of the Federation of Malaysian Consumers Associations recently. He emphasised the need for a product disclosure statement in which all key terms and conditions are presented to customers in simple language so that consumers are very clear about what they are signing up for.
Bank Negara should work with the Life Insurance Association of Malaysia and the General Insu-rance Association of Malaysia to formulate clear and concise guidelines for customers to read and understand terms and conditions.
Customers must also be aware that they have the right to ask agents to provide them with a written agreement on rebates that must be signed by both parties to prevent them from being cheated or falling prey to cheating agents.
Customers should always ask agents about issues they may face if they were to terminate insurance policies before the maturation dates.
Also, be aware that insurance companies, according to the Life Insurance Association of Malaysia, provide a “cooling off” period, also known as “free look” period, of 15 days for the customer to study the details and terms and conditions of the policy before deciding if they want to go ahead with the policy or return it.
If the customer decides to return the policy, he or she would be entitled to a refund of costs after deducting medical examination and administrative costs. The waiting period for the refund is 30 days.
In a nutshell, both parties must take responsibility: The agent must be sincere, knowledgeable and committed in his or her work and the customer must be alert and request thorough explanations about policies they want to purchase, including about penalties for revoking policies.
Be a smart and wise consumer!
S. BASKARAN ,Senior Manager National Consumer Complaint Centre (NCCC)