In Case 1 discussed above, the Ombud also made the following statement:
“The investigation further revealed that the respondent, in advising the complainant, had compared various financial products on the basis of a premium, leading to the product with the cheapest premium being selected by the complainant.”
Moneyweb reported as follows:
“OUTsurance has paid millions in R400s and significantly upped its client base since the launch of its ubiquitous R400 car insurance promotional campaign.”
“The campaign, launched over four years, promises to pay potential clients R400 in cash if OUTsurance is unable to beat their current car insurance premium on a like-for-like-basis, and it promises monthly savings to those who switch to OUTsurance to take advantage of lower premiums.”
“The campaign works for us, we won’t do something for four years if it doesn’t work for us. And in fact, we’ve changed the offering now, where if you haven’t claimed in the past three years and we can’t save you money, we’ll give you R800,” according to OUTsurance chief executive Willem Roos.
Granted, there are different rules applicable to direct insurers and the rest of us, but the principle that the client should be placed in a position to make an informed decision is a universal one.
If using the cheapest price to get the client to buy is not acceptable where an FSP is concerned, surely incentivising people financially to test the waters on the same ground is even worse?