The problems with commission selling in the insurance industry are not unique. They also apply to the hearing aid industry.
In Australia, concerns about how this industry conducts itself with its prospects and clients has claimed the attention of their competition authority, the Australian Competition and Consumer Commission.
Here is their latest review of this industry's sales practices.
This World Hearing Day, the Australian Competition and Consumer Commission is releasing a report Issues around the sale of hearing aids to encourage industry to reconsider commissions, disclosure and sales practices in the context of the Australian Consumer Law.
Hearing aids range in price from around $1,500 to $15,000 per pair. The ACCC is encouraging consumers to be aware that hearing clinics are for the most part profit-making businesses like any other store and to shop around for the best hearing aid for their needs.
“The ACCC is concerned about a range of business practices in the hearing services industry, particularly around incentive based sales and commissions that are commonly used to motivate clinicians to sell hearing aids,” ACCC Commissioner Sarah Court said.
“Some hearing clinics encourage clinicians to sell more expensive hearing aids by setting sales targets, paying commissions to clinicians, having arrangements that favour certain brands or are owned by companies that manufacture hearing aids.”
“Commission-based selling can provide incentives to clinicians to supply hearing aids that are unnecessary or more expensive than a consumer needs. This has the potential to lead to consumer harm where trusted advice is being given to patients, many of whom may be vulnerable or disadvantaged. Hearing clinics should be conscious of the incentives they offer and consider remuneration structures that reward service and quality advice ahead of sales,” Ms Court said.
“The ACCC has requested that hearing clinic operators review their incentive programs and performance measures to ensure that they do not create a conflict between healthcare advice and sales. We encourage consumers and clinicians to contact the ACCC with any specific consumer protection concerns about the sale of hearing aids.”
The report is available at: Issues around the sale of hearing aids
The ACCC has also released guidance material to help consumers make an informed choice when purchasing hearing aids.
This year, the ACCC is looking closely at misleading behaviour that may be driven by sales commissions, particularly in industries that enjoy a high level of trust and where commissions may not be expected, such as the supply of hearing aids.
As part of its enquiries, the ACCC conducted an online survey through its public consultation hub and received 85 responses: 59 from consumers and 26 from industry. We contacted a number of survey respondents to obtain further information about their concerns. The ACCC also contacted the 10 largest hearing clinic operators to obtain information about their sales practices.
Not all clinics or clinicians engage in the concerning conduct that was brought to the ACCC’s attention and some consumers indicated positive experiences dealing with hearing clinics and clinicians.
You can read their full Report here.