Deceptive Sales Practices in the Insurance Industry

Deceptive sales practices can ruin the reputation of an entire industry. This is because they can undermine consumer trust in a product or service. There are some common examples of deceptive sales practices, and you should know what to look for.

The Federal Trade Commission (FTC) has found that numerous deceptive and illegal acts are being perpetrated in the insurance industry. These include misleading price claims, savings claims, and failure to disclose pertinent facts.

Another deceptive sales practice is a “bait and switch” sales pitch. A retailer will lure a prospective customer with a good offer and then sell them a higher priced version of the product. This is a very common practice in retail. For example, a person may be interested in buying a new car, but be fooled by a picture of an expensive model. Or a product may be advertised as a “free” sample. Although this is a very popular tactic, it can be misleading.

Many people have been tricked into buying products and services that they never asked for. This includes policies that are illegally sold through direct mail and magazine ads. You can also be victimized by companies that sell illegal policies over the internet. In most cases, you can protect yourself by checking the license of the company, the agent, and the policy.

The FTC has released several Guides against deceptive pricing. These Guides set out principles that the commission will use to assess the merits of a price claim. They will also provide guidance to state courts hearing deceptive pricing claims.

While there are no exact numbers on how many consumers are being duped, the number is probably in the hundreds. One example is the alleged deceptive practices of Metropolitan Life Insurance Company, one of the country’s largest insurance firms. The company was accused of allegedly ripping off customers out of over $11 million. The FTC claimed that the firm used a “false and misleading” sales pitch.

Another deceptive sales practice is the manufacturer’s suggested retail price. Usually, the price is only slightly lower than the going rate. However, in some instances, the manufacturer’s suggested retail price can be much higher than the actual selling price. It is important to note that a comparison ad should always refer to the former price.

The Federal Trade Commission has a list of other deceptive sales practices, including false claims, false advertising, and phony billing schemes. Some of these are relatively easy to spot and others are less obvious. If you are the victim of an act of deceptive sales, you should consider legal action. Even if you do not succeed, you will be protected from future claims.

Finally, you can check to see if the agency or company is licensed by the state. A licensed agent will be able to prove that they are a credible source of information. When a company or agent is using a high-pressure sales technique, this could be a warning sign.