FICOM orders Western Life to stop selling creditor insurance through BC payday lendersBy Donna Glasgow | September 21 2017 01:30PM
British Columbia’s Financial Institutions Commission (FICOM) announced Sept. 20 that it has issued a cease and desist order against Western Life to stop the sale of creditor group insurance through payday lenders in the province.
A collaborative investigation by FICOM and Consumer Protection BC produced evidence that payday lenders Venue Financial Ltd. and CashCo Financial Inc. “engaged in aggressive and deceptive sales of Western Life insurance products.”
FICOM says these practices include consumers “clearly” not being made aware they have purchased insurance or that it is a voluntary product; consumers not being provided sufficient information or an opportunity to make an informed decision if they want or need the insurance; and controls not in place to ensure consumers are not sold insurance when they are ineligible for coverage.
Insurers must take responsibility
“The fair treatment of consumers is paramount to FICOM, and we have been clear with insurers that they must take responsibility for the way their products are sold,” said Chris Carter, Deputy Superintendent of Financial Institutions. “In collaboration with Consumer Protect BC, we have determined that Western Life has not lived up to its obligations to consumers.”
Under FICOM’s order, Western Life must also contact everyone who they insured via payday lenders, explain the insurance product, confirm their eligibility and offer to cancel the coverage and provide a refund.
Western Life complying with order
In a separate announcement, Western Life announced that it is fully complying with the order and is no longer offering or selling group creditor insurance in BC through the distributors that are the subject of the order.
"The fair treatment of our customers and compliance with our regulatory obligations are our top priorities," said Western Life President, Louise Mitchell. "We are concerned by what we read in the order and are launching an investigation so that we can ensure complete compliance by our distribution partners in the future."
To learn more, read FICOM’s cease and desist order.