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Phone marketing and personal finance problems don't mix

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The red line between telephone marketing and personal financial advice has been clarified by the Federal Court, after it sided with ASIC's claim that Westpac deliberately used telephone marketing to persuade customers to consolidate their superannuation into a BT account.

Giving general banking advice by phone could be considered above board in many contexts, but not this one.

The decision to consolidate super depends on personal circumstances and, as such, requires personal advice.

In the court's words:

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"...there was an implied recommendation in each call that the customer should accept the service to move accounts funds into his or her BT account carrying with it an implied statement of opinion that this step would meet and fulfil the concerns and objectives the customer had enunciated on the call in answer to deliberate questions by the callers about paying too much in fees and enhancing manageability."

It's a mouthful in desperate need of punctuation, but the crux of it is this: Westpac gave advice to questions affecting, and affected by, personal financial circumstances. And it shouldn't have.

But the grift went further.

Westpac deliberately strong-armed customers into making the decision then and there.

"...there was an implied recommendation in each call that the customer should accept the service to move accounts funds into his or her BT account."

As the court finding also notes, the right thing would've been for the bank to provide options to the customer, who could then hang up, seek personal advice, and then call back the bank with an acceptance or refusal.

The moral of the story - always seek personal advice for issues affected by personal circumstance.

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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