A recent article of the Namibian newspaper (July 2010), quotes a study which has found that "Regulators need to up their game". The study "expressed concern about the conduct of the industry and has warned that the reputation of the Bank of Namibia (BoN) and the Namibia Financial Institutions Supervisory Authority (Namfisa) will suffer unless they step up supervision." In the study, mention is made of certain insurance companies that make use of misleading advertising when offering products as "free".
This has to be a wake up call to us as consumers.
As a lobby group, we have regularly been contacted by customers who do not receive the service they expected when they bought the products as advertised. A common complaint is about the legal insurance product so widely advertised in our newspapers, radio and television. In these adverts, the consumer is made to believe that a monthly premium will give them access to legal assistance should the need arise. A typical example of how this insurance company works is what happened to Marco H.
Marco was a client of "legal insurance" and was not worried if something should go wrong. One morning, his employer informed him that there were suspicions of theft and the employees had to each take a lie detector test. Marco called his legal insurance company but was told that they do not cover labour issues. he then reluctantly took the lie detector test.
The employer decided to lay criminal charges with the police after the tests and the whole group of employees were taken to the Windhoek central police station and charged. He called his legal insurance company, and was informed they could not assist him in a criminal case.
Luckily for Marco, he was able to call up a friend that could get him bail arranged and he was thus not forced to spend the weekend in jail. On the Monday, he duly went to his legal insurance company at their big headquarters building to get some assistance. After reporting at the reception, he was rather rudely informed that his case did not meet the standards of a claim.
This was definitely a case of misleading advertising if not theft. BUT what can Marco really do? Very little. Even the institutions that are supposed to do something, cannot help.
We once again point out that we need consumer laws, and consumer protection agencies that have teeth to prevent these companies for abusing the Namibian consumer.
Please see attached below a message on the same issue sent to our members last year November.
Namibia Consumer Protection Group
The cost of taking legal action can be prohibitive. Could you afford to claim compensation if you were injured in an accident, unfairly dismissed from work or had a dispute with a business?
A friend of mine has had legal insurance and believed he was covered. About a month ago, he was accussed of being involved in a theft syndicate at his work. He immediately called his legal insurance company, but was informed they do not cover criminal cases.
He was taken for a polygraph test (is that legal in Namibia), and informed that he had failed the test. This led to him leaving the job that morning to go speak to his legal insurer.
Yeah right. They do not cover the expenses for a labour case either.
WHAT is it with insurance companies that do not want to pay claims? If you complain at NAMFISA they do very little to help.
If I am going to buy legal insurance I expect:
• Bail negotiations and applications on members’ behalf
• Depositing of the bail amount/issuing of bail guarantee on behalf of arrested member
• Bank and insurance matters
• Building and construction matters
• Contractual disputes
• Debt collection
• Letters of demand
• Personal injury claims, etc
• Fraud, theft, robbery or assault
• Bail applications
• Consumer issues
• Driving under the influence
• Reckless driving
• Search warrants, etc.
• Ante-nuptial contracts
• Custody disputes
• Family violence matters
• Maintenance disputes, etc.
• Disciplinary proceedings
• Pension payout disputes
• Restraint of trade agreements
• Unpaid wages
• Working conditions
Surely this is not too much to ask?