A major insurance company has been ordered to stop selling policies through two payday lenders in B.C.
The directive came after complaints from customers who bought insurance without their knowledge, some of whom weren’t even eligible for it.
The order, issued by B.C.’s Financial Institutions Commission (FICOM), directs Western Life to cease all product sales through Venue Financial and CashCo Financial.
FICOM said the two companies were engaged in “aggressive and deceptive sales” of Western Life products.
FICOM Deputy Superintendent Chris Carter said some clients weren’t told the insurance was a voluntary product, weren’t given enough information and weren’t being made aware that they had bought the product.
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He added that some lenders weren’t giving customers legally required disclosures, and didn’t have controls in place to stop people buying insurance they didn’t qualify for.
“We’re not talking insignificant amounts. Consumers clearly aren’t being made aware they’re buying insurance, and it’s being communicated in many instances as being in effect embedded in the cost of the loan.”
Western Life has been ordered to contact everyone who bought through the payday lenders to provide details of the insurance and offer to cancel and offer refunds.
Carter said that anyone who believes they were subject to improper insurance sales practices should contact FICOM and Consumer Protection BC.
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He said the lenders have been given a “cease and desist” order.
“I would have thought that there would be reputational implications, so we would expect all regulated entities who have authorization to do business in B.C. would comply with orders.”
Venue and CashCo have also been barred from selling creditor group insurance from any insurer in the province until the regulator is satisfied they’re adhering to all regulations.
FICOM said that Consumer Protection BC is also taking a separate action against the two payday lenders, along with a third company called Speedy Cash over the sale of credit protection insurance.
Requests for comment from Western Life have not been returned to CKNW.