Policyholder Protection Rules established by the FSB, prevents unsolicited SMS communication

19 February 2018FSB

The Financial Services Board (FSB) has as of 1st January 2018 passed new regulations, Policyholder Protection Rules (PPRs). It states that consumers must be able to opt out of insurance marketing SMSs at no cost.

The average consumer receives numerous SMSs a month from insurance providers. Potentially millions of unsolicited insurance related SMSs are sent per year.

The number of SMSs sent to consumers has rapidly grown because it’s less intrusive than a phone call, and it’s low cost. The time has come for insurers to market to consumers ethically. Contravention of the PPRs could attract enforcement action if an insurer does not comply with the legislation.

PPR requires insurers to consider the appropriateness of the medium in relation to the complexity of policy features or the information communicated; this also applies to the use of SMS as an advertising tool.

The consumer must be afforded the opportunity to ‘opt-out’ of receiving marketing, and insurers may not allow consumers to incur a charge, as they have done so to date.

Reply “STOP”

Consumers want to be able to opt-out of marketing from insurers but receive updates and alerts regarding the status of claims, for example. As a result, ‘do not contact’ blacklists are ineffective as any communication, regardless of content is blocked.

PPR is a step in the right direction for consumer rights regarding direct marketing; and will hopefully lead all FSB members, and ultimately all businesses engaging in direct marketing, to make use of a mechanism that allows consumers to choose what they receive.

The bottom line: consumers now have a voice to choose what insurance marketing they receive, giving them the power to hold to account insurance providers that continue to disregard the free reply SMS mechanism.

By replying "STOP" to insurance SMS marketing, insurers are required to unsubscribe you at no cost to your airtime or monthly balance. The introduction of PPR is an excellent win for consumer protection and the longevity of direct marketing.

If a consumer is charged, they should contact the insurer and lodge a complaint and demand a refund. Should this not prove fruitful consumers can lodge a complaint with the FSB.

Short-Term Insurers (STIs) have until June 1st, 2018 to implement no-cost opt-outs to consumers.

Should you want to find out more, let me know and I can put you in touch with the FSB, or bulk SMS provider, SMSPortal.

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There may be a shock on the cards on 21 Feb when the Finance Minister announces that there will be a 2% VAT increase. What effects will this have?


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