is an amusing picture in the magazine Business 2.0 of July
04. Its a picture of a medicine bottle labelled:
Take two tablets, two times daily, to Save $$$.
Sometimes I think thats a really useful prescription.
You see, some of us are so thick-skulled, when it comes to
doing whats right for ourselves and our families, the
irony confounds me! The irony is that the wrong people come
along and serve up skulduggery and some of us actually bite
hook, line and sinker.
The truth is that unethical behaviour on the part of those
who present themselves as financial advisers, and insurance
salesmen is a recurrent problem. Thank God that the Central
Bank inspectors are currently seeking to bring legislation
to address the problem.
Therein was a major failure of the Insurance Act 1980, which
provided no real remedy for consumer redress, in the event
of unethical advice and actions on the part of the financial
providers and their intermediaries.
The large problem right now is that clients who complain about
unethical behaviour are unwilling to put their complaints
into writing. The unwillingness stems from either a humane
desire to avoid getting the person/s into trouble (and cutting
off their income), or a fear of lengthy court proceedings,
or simply, out of sheer timidity.
The problem with all these choices is that perpetrators continue
to be unscrupulous. More people are cheated and more unreported
acts are unleashed upon gullible consumers.
My experience shows that it is only when the principal (the
corporate company) takes a direct hit in terms
of its own funds, that the principal will take action to dismiss
such unscrupulous people. Until then, the clients and customers
take all the licks.
And I make no apologies for what I have seen and experienced.
This is a vexing issue!
If the regulatory authorities get the relevant complaints
from customers in time, there will be concerted action to
address the problem at the highest levelthe level of
legislation. But as long as customers are willing to suffer
quietly, were trapped.
If the regulators experience is that unethical acts are isolated,
there will be little urgency to tackle them. However, if they
know the real volume and the incidence of such problems, there
will be swift action, I am assured.
Another problem with unethical people is the ease with which
they find employment with another similar company. What assurances
do consumers have that they will not continue with undesirable
behaviours at their new employers?
Can the new legislation treat with some rehabilitative training
within the construct of a probation officer supervision?
One of the acute problems current in the insurance industry
is rebating. Rebating is the act of returning to the client,
a portion of the commissions earned by the salesman. This
has become so prevalent, that there are clients who now ask
for your commissions up-front. And they use that to pitch
one salesman against another, often within the same company.
Such clients are themselves unethical and it is against their
own interests to write a complaint. How can we remedy this
The stark reality for the rebating salesman or agent, is that
if he returns the majority of his commissions to his clients,
he will have very little left in his pay cheque at the end
of the month. Soon enough, he will have no qualms about pocketing
his clients money.
So they both loose, and may resort to doses of prescription
I personally prefer the Bob Marley prescription in Would You
Dont let them fool you
Against the darkness,
There must come out the light!
To be continued next week