Concerns Raised After Undercover Spot Checks
Many Consumers Decide on Insurance Enrollment Without Prior Knowledge
There has been a growing number of cases where consumers fall victim to the misselling of insurance products at expo venues focused on childcare, marriage, and pets, prompting calls for increased vigilance.
On August 26, the Financial Supervisory Service announced that it had issued a consumer alert at the "caution" level regarding the misselling of insurance products at expo venues.
According to the results of undercover spot checks conducted by the Financial Supervisory Service, sales staff lured consumers into booths, introduced insurance products, and quickly proceeded to finalize contracts in a streamlined manner.
Insurance companies or insurance agencies set up one or two booths and deployed around 20 insurance planners. These planners attracted consumers by offering gifts such as baby toothbrushes or by proposing financial planning consultations.
Once consumers were seated, the planners requested personal information such as names and phone numbers and then introduced insurance products.
They promoted products such as short-term payment whole life insurance with low surrender value, as well as indemnity and comprehensive insurance policies. In particular, at childcare expos, they attempted to recruit customers for children's insurance (fetal insurance).
If a consumer expressed interest in signing up, the contract process-including the pre-contract duty of disclosure-was immediately completed using a mobile application, followed by a "happy call" in which the consumer was asked questions to confirm their understanding of the insurance product and provided responses.
The Financial Supervisory Service pointed out that many expo visitors decide on the spot whether to enroll in insurance products, often without any prior knowledge of insurance.
For visitors who stop by multiple booths, there is inevitably insufficient time to thoroughly read the terms and product descriptions or to verify whether they have properly enrolled in the necessary riders.
The Financial Supervisory Service urged consumers not to make immediate decisions about enrolling in insurance products and to carefully reconsider whether the product truly meets their needs.
In addition to the explanations heard at the expo, consumers should review the terms and product descriptions themselves, and personally and truthfully complete the duty of disclosure and happy call, rather than relying solely on the planner's guidance.
A representative from the Financial Supervisory Service stated, "To prevent potential consumer harm arising from insurance sales at expos, we plan to form a 'joint undercover inspection team' with insurance associations and insurance companies," adding, "We will conduct unannounced inspections of insurance sales activities at expo venues."
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