Since publishing ASIC Regulatory Guide 38 ("RG 38") which covers the hawking prohibition, ASIC has issued periodic reminders and warnings to AFS licensees and Australian Credit Licensees (credit licensees) who provide financial services to retail clients or engage in credit activities.
As an example, ASIC noticed that some financial advice licensees were using cold calling operators to generate leads and referrals. These cold calling operators had obtained consumers' personal information from third-party data brokers or by using online click-bait advertisements. The financial advisers would then recommend consumers switch to specific superannuation products, particularly high-risk property managed investment schemes. As a result, ASIC Commissioner Alan Kirkland noted that many Australians between 25 to 50 years of age were "at risk of having their retirement savings eroded."
Cold calling and other hawking tactics are an area of focus for ASIC, especially in relation to superannuation. However, all retail AFS licensees and credit licensees should consider their contact with clients and ensure it does not breach the hawking prohibition.
A good start is to consider the following questions about your marketing strategies and materials:
- How do you market your product?
- Does your marketing material include an offer or invitation to acquire a financial product or credit product?
- Do you contact consumers with a view to make an offer or invitation in relation to a financial or credit product who have not already requested contact from you?
- Who is responsible for developing marketing strategies and approving material?
Further Reading
- ASIC issues warning over dodgy cold calling operators and online baiting tactics (Media Release)
- ASIC publishes guidance on hawking reforms
- National Advice Solutions charged with anti-hawking offences following alleged superannuation sales cold calls
- ASIC Regulatory Guide 38 – The hawking prohibition
- Sophie Grace Blog "Anti-Hawking Prohibition Reforms for Financial Products"
- Sophie Grace Blog "ASIC Action – anti-hawking"
- Sophie Grace Blog "Marketing Guidelines for Financial Services and Credit Providers"
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
