ARTICLE
21 April 2025

ASIC Issues Warning over Dodgy Cold Calling Operators and Online Baiting Tactics

SG
Sophie Grace Pty Ltd

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Sophie Grace is a leading Australian firm specialising in both compliance and legal services to participants within the financial services and credit industries. We have serviced Australian and international clients across the financial sector for over a decade. From obtaining the required licences to operate your business to the provision of ongoing compliance support, many businesses have benefited from Sophie Grace’s extensive knowledge in the financial and credit space. We take pride in our ability to offer tailored solutions to a broad range of businesses whilst keeping business practicalities and obligations to regulators at the forefront of our minds when delivering services and advice. Our consultancy services can equip you with assistance and clarity in your business endeavours.
ASIC has issued periodic reminders and warnings to AFS licensees and Australian Credit Licensees.
Australia Finance and Banking

Since publishing ASIC Regulatory Guide 38 ("RG 38") which covers the hawking prohibition, ASIC has issued periodic reminders and warnings to AFS licensees and Australian Credit Licensees (credit licensees) who provide financial services to retail clients or engage in credit activities.

As an example, ASIC noticed that some financial advice licensees were using cold calling operators to generate leads and referrals. These cold calling operators had obtained consumers' personal information from third-party data brokers or by using online click-bait advertisements. The financial advisers would then recommend consumers switch to specific superannuation products, particularly high-risk property managed investment schemes. As a result, ASIC Commissioner Alan Kirkland noted that many Australians between 25 to 50 years of age were "at risk of having their retirement savings eroded."

Cold calling and other hawking tactics are an area of focus for ASIC, especially in relation to superannuation. However, all retail AFS licensees and credit licensees should consider their contact with clients and ensure it does not breach the hawking prohibition.

A good start is to consider the following questions about your marketing strategies and materials:

  • How do you market your product?
  • Does your marketing material include an offer or invitation to acquire a financial product or credit product?
  • Do you contact consumers with a view to make an offer or invitation in relation to a financial or credit product who have not already requested contact from you?
  • Who is responsible for developing marketing strategies and approving material?

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