ASIC’s approach to insurance telephone marketing

ASIC has published details of the resolution of its concerns with AEGON Direct Marketing Services Australia Pty Ltd (ADMS) that some telephone sales of life risk insurance products may have been misleading, or likely to mislead consumers.

ASIC was concerned that the direct marketing calls may have created the impression that customers were not being asked to make a decision to purchase the insurance product immediately over the phone and in certain circumstances, customers were told that they would be sent policy documents so that they could review and make a decision whether to purchase during the cooling-off period.

ASIC also had concerns with telephone sales representatives using the words ‘enrol’, ‘activate’, ‘start’, or ‘issue’ when referring to purchase of an insurance product which may not have made it sufficiently clear to consumers that they were purchasing insurance products.

In response, ADMS has implemented, or is in the process of implementing, a number of changes to its calling script. Some of the changes include the following:

  • The word ‘enrol’ has been replaced by ‘purchase’.
  • The removal of the phrase, ‘you don't have to make a decision today’.
  • The customer is asked to confirm their understanding that they are ‘purchasing’ an insurance product.
  • The provision of an expanded general advice warning towards the start of the direct marketing call.
  • Overall, more wording has been made mandatory for telephone sales representatives to follow.

To supplement the latest script change, it intends to circulate a written reminder to telephone sales representatives every three months, highlighting the importance of observing the script during each call, and is designing an ongoing training plan for its Quality Assurance and Sales Verification teams.

It is also taking steps to ensure that all customers receive a second billing reminder letter before the end of the cooling-off period.

University fails in claim for ownership of employee invention

In University of Western Australia v Gray [2009] FCAFC 116 , the University failed in its appeal against a Federal Court judgment that ownership of an invention relating to cancer treatment belonged to its employee who was appointed to teach and to conduct and stimulate research (originally discussed here).

In a lengthy decision with significant commercial implications, the Full Court totally rejected UWA’s claim against Dr Gray that by reason of his employment he had obligations to UWA in respect of the inventions, and that as a result UWA had proprietary rights in respect of them and of associated patent applications and patents, and that by reason of Dr Gray’s having dealt with the inventions as his own UWA was entitled to obtain certain remedies from him.

Can you protect your old marketing ideas?

In Newcastle Permanent Building Society Ltd v Allan Crew[2009] ATMO 55 the Building Society failed in its attempt to prevent words (Our Town and Our Town Newcastle) that had been used by it in previous marketing campaigns from being registered as Trade Marks for a proposed television series about Newcastle.


The Registrar of Trade Mark’s Delegate decided that he was not satisfied that the Building Society’s residual reputation in its trade mark was extensive enough for the use of these substantially identical trade marks in the entertainment field to deceive or cause confusion in the Australian marketplace.

Can you protect your old marketing ideas?

APRA prudential supervision update

Beyond the Global Financial Crisis: A Prudential Perspective by John Trowbridge, an Executive Member of APRA, is a useful update of the structure and changes , both locally and internationally, in four industries, namely banking, general insurance, life insurance and superannuation.

Austrac PLI – notices to reporting entities

Public Legal Interpretation 12 sets out AUSTRAC’s views on its powers to serve notices on reporting entities under the AML/CTF Act. The PLI does not cover the giving of infringement notices.

Failure to comply with a notice may be either a criminal offence or result in a civil penalty. The PLI sets out the requirements for the different notices, including contents and methods of service.

Draft model OHS Act released for comment

The Workplace Relations Ministers' Council through Safe Work Australia has released the draft model Occupational Health and Safety Act and administrative regulations for public comment until 9 November 2009.

The new occupational health and safety reform agenda aims to harmonise OHS legislation across Australia.

It is intended that all jurisdictions will enact model OHS Act and model regulations and complete all related transitional arrangements by December 2011.

Financial Stability Board Compensation Principles Implementation

In conjunction with the recent G20 meeting the Financial Stability Board has issued Implementation Standards for its Principles for Sound Compensation Practices for financial institutions.

The Implementation Standards contain detailed specific proposals on compensation governance, pay structure and risk alignment and disclosure to strengthen adherence to the FSB Principles, issued in April 2009. Compliance by national authorities will be reviewed in March 2010.

Margin Lending: draft disclosure regulations and sample PDS

Treasury has released draft regulations for margin lending disclosure and an example Product Disclosure Statement for public consultation until 23 October 2009.

The draft regulations and an example Product Disclosure Statement (PDS) were developed by the Financial Services Working Group.

The proposed solution to complex lengthy disclosure documents is to prescribe a margin loan PDS that has four A4 pages of content, with additional pages containing a title and table of contents. It will permit the incorporation of other material by reference.

The Government proposes to amend the Corporations Regulations 2001 to provide a specific disclosure regime for standard margin lending facilities.

EFT Code update