CCPC warns against unscrupulous Insurance Agents
2019-11-08The Competition and Consumer Protection Commission (CCPC) has expressed concern on the rise of unscrupulous individuals who have embarked on exploiting consumers by masquerading as agents for some insurance companies. The Commission recorded an increase in the number of consumer complaints recorded during the period January to September, 2019 which indicate that 18% of the Two Thousand and Forty Two (2042) consumer cases it has investigated emanate from the insurance sector with the most exploited individuals being rural based civil servants.
CCPC Director Consumer Protection Brian Lingela has observed that the incidence of complaints from the insurance sector regarding unfair trading practices by insurance agents has increased and is second only to retail trade which stood at 45%. He said that the majority of the cases the Commission has been handling show that some insurance agents and employees have resorted to using consumers’ personal details to enlist them to insurance products and services without their consent.
The Commission has established that unscrupulous insurance agents enlist consumers to insurance policies they have not consented to. Consumers, especially civil servants in rural parts of the country often get shocked to see deductions on their pay slips for policies they have not consented to. This trend is common in Western, Eastern, Muchinga, North Western, Southern, Northern and Luapula provinces.Further, the Commission has observed that some agents move from insurance company to another along with their previous customers’ personal details after being dismissed by their employers. The personal details are then used by agentsto meet sales targets for their new employers and in the process result in unsolicited pay slip deductions to the detriment of consumers.
It is of great concern to the Commission that while it is easy to effect salary deductions for unsolicited insurance products, it can take more than six months to a year to stop the deductions. This conduct is not only fraudulent but violates Sections 45, 47 and 49 (5) of the Competition and Consumer Protection Act (CCPA) No.24 of 2010 which clearly prohibits unfair trading practices and false or misleading representations and is punishable with a fine not exceeding ten percent of an enterprise’s annual turnover.
In addition, agents engaging in fraudulent transactions will be personally liable and can be prosecuted.
The Commission is therefore, advising civil servants especially in rural parts of the country to desist from disclosing confidential information such as their National Registration Cards (N.R.C) and Employee Numbers to individuals who may claim to be agents of any insurance company until they are ready to accept a proposed insurance contract.
The Commission is further warning insurance companies to ensure their agents do not engage in such conduct as they will be punished as principals. CCPC is mandated by law to enhance Competition and promote Consumer welfare for the growth of the economy and benefit of the people of Zambia.