It was reported in The New Paper that some insurance agents were targeting the elderly, the illiterate, and the poor in their homes to sell them insurance products.
Give Us Your Passwords (TNP)
What would happen was that the agents would ask for the SingPass passwords in order to access the CPF account information to see whether they have money to buy insurance products. This could be health insurance (using Medisave) or investment-linked products (using Ordinary Account).
A common tactic was to ask people whether they have upgraded their government Medishield plan. Some elderly people might be mislead into thinking that it was a nationwide upgrade given by the government, not knowing that they were actually using their own Medisave to pay for this voluntary upgrade.
When told that a person has already upgraded their plan, the agents even say that they could let it lapse and take up the one being offered. This is an unethical practice of twisting a policy, and is not definitely not recommended for health products, for reasons given here.
Some of the elderly are also too trusting, which makes them easy targets.
“I was told to sign a lot of papers, but I did not understand what was on them. And the two didn’t explain what the insurance was used for or how it works.”
The full-scale customer callback by supervisors of vulnerable customers that was proposed in the FAIR review could help to eliminate some of these unethical practices. Such unethical practices would have to be stemmed out to improve the reputation of the financial services industry.
Unfortunately, the callback requirement will only apply to a selected group of insurance agents, which may or may not involve the rogue agents.
So how can vulnerable customers be protected in our caveat emptor (buyers beware) landscape that we operate in?
One way is to increase the punishment meted out to wrongdoers, as this will serve as a deterrent effect. The common practice now of issuing reprimands or banning individuals from the industry (some of them simply switch to other sales related jobs like property agent) seems like a mere slap on the wrist.