What you need to know about the new direct marketing guidance note
Nadine Mather and Chloë Loubser
Beware when buying insurance at point of sale
The Ombudsman for Short-Term Insurance cautions consumers not to be pressurised into purchasing an insurance product at point of sale, as often these products do not meet consumers needs and are sometimes more costly than anticipated.
Often an array of insurance products are offered to consumers when they purchase goods on credit. Consumers should consider whether they really need the product offered and check who underwrites the product and administers its application.
Do not purchase something that you do not fully understand, says Brian Martin, The Ombudsman for Short-Term Insurance. Consumers should always enquire whether the person offering these products is a licensed financial services provider and is able to provide objective and impartial advice.
"In addition a copy of the policy document or the schedule which sets out the benefits offered should be given to the consumer.
It is also important to remember that in terms of the National Credit Act, no credit provider may force you to take out insurance through their nominated insurance company. If in doubt, consumers should not sign anything before seeking professional advice from either an insurance broker or attorney.
The Ombudsman for Short-Term Insurance says that if it is a requirement of the finance agreement that the goods must be insured and if you have not arranged the insurance yourself, consumers should insist on written proof that the goods have been insured before removing them from the store.
Published courtesy of
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