Business Report - No clarity on whether Absa broke law

No clarity on whether Absa broke law

A meeting between a government agency and Absa has failed to clarify whether the bank's insurance company used inertia marketing, which was banned by the government in 2005.

However, agreement was reached at the meeting with the Department of Trade and Industry last week on four steps Absa would follow in regard to its home underinsurance project. Absa requested the meeting to seek legal clarity after allegations the project was using inertia marketing techniques.

This follows Absa sending letters to 21 347 of its 480 000 home loan clients in November alerting them that their homes were underinsured and advising them the insured value of their properties and premiums "will be automatically increased" by the level of underinsurance if Absa did not receive a response to the letter by December 17.

Inertia marketing involves taking or demanding payment for goods and services supplied to consumers who have not actively refused offers for them.

Ebrahim Mohamed, the chief director of the office of consumer protection, consumer and corporate regulation division at the Department of Trade and Industry, said the issue of Absa's alleged use of inertia marketing had been resolved in the sense that Absa would not in the future require consumers "to do something to stop something happening".

Edwyn O'Neill, the managing director Absa Insurance Company, said Absa had committed at the meeting to be "absolutely compliant with the laws of the country" and not in the future be involved in inertia marketing, while stressing that Absa had not admitted nor agreed that it had used inertia selling in the past.

Mohamed said there was not any agreement that Absa had never used inertia selling in the past.

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Fair practice? I think not! Banks should advise their clients properly, as any proper financial adviser should do. Increasing their clients insured values and premiums without the client's consent is simply not on. That's why we recommend taking homeowners insurance with your own insurer, not the bank's insurer!

Tracker saves family from potential deadly blaze

Tracking device continues to work despite vehicle being on fire

A family in Boksburg is today (January 21, 2010) recounting its good fortune after their Tracker saved them from what could have been a fatal blaze at their home.

The incident happened at approximately 05h00 this morning when Tracker contacted the family after receiving a ‘battery disconnect’ warning signal from one of their vehicles. The family was then asked to check if the vehicle was safe.

‘When our customer looked outside, she noticed that it looked particularly “misty” in the area around her car and decided to go outside for a closer look. As she approached the vehicle she realised that what she had thought was mist was in fact smoke billowing out from the vehicle’s engine bay. She rushed back inside and, together with the help of her family, was able to use a household fire extinguisher to put out the blaze,’ explains Gareth Crocker, Tracker’s Communications Manager.

But the drama did not end there. A few minutes later, Tracker called again, saying that they had received another warning signal from the vehicle. As the family returned to the car they noticed that the blaze had flared up again. Fortunately, they were again able to extinguish the flames.

The vehicle in question had failed to start the day before and had to be towed home from a neighbour’s house, due to a suspected electrical fault. It had also just been filled with fuel and was parked directly alongside the family’s second vehicle which also had a full tank of fuel.

‘The customer believes that had the fire been allowed to continue it may well have spread to both the second car and the house, and possibly even to her family who were sleeping at the time,’ says Crocker. 

Damage to the car has been limited to the engine bay, the dashboard and some upholstery near the front seats. 

‘We’re used to our devices tracking down stolen and hijacked vehicles and helping people in medical emergencies, but preventing a potential deadly fire is probably a first for us,’ comments Crocker. ‘Our engineering team is particularly proud that our SkyTrax device and its sensors continued to function despite the fire. A great deal of effort is put into ensuring that our devices are robust enough to handle the most testing conditions – a point underlined by the fact that we have, over the years, recovered several vehicles submerged under water.’