ASIC commenced civil penalty proceedings in the Federal Court yesterday against a number of life insurers for breaches of the law arising from telephone sales of life and accidental injury insurance.
The corporate watchdog has targeted Select AFSL, BlueInc Services, Insurance Marketing Services and director Russell Howden for breaches of the law arising from telephone sales of life.
It has also speared accidental injury insurance issued by St Andrew’s Life Insurance under the brand names “Let’s Insure” and “FlexiSure” during the period 1 February to 19 March.
ASIC’s action follows Select’s appearance before the Hayne commission.
The regulator has alleged that Select, BlueInc and or IMS in their dealings with 14 consumers, engaged in breach of provisions of the Australian Securities and Investments Commission Act 2001.
For some or all of the consumers, the providers were said to engage in unconscionable conduct both when selling insurance and or taking payment details over the phone and when consumers attempted to cancel their insurance policies, along with enacting undue harassment, coercion and making false or misleading representations.
Of the 14 consumers, nine lived in remote communities and many faced language barriers in understanding what was being sold to them because English was not their first language.
ASIC’s proceedings also include claims that Select, BlueInc and Mr Howden breached provisions of the Corporations Act 2001 in relation to the provision of conflicted remuneration to sales agents, including a cruise to the Gold Coast, a Vespa scooter and trips to Las Vegas and Hawaii.
ASIC recently consulted on its proposal to ban the sale of CCI and direct life insurance through unsolicited telephone calls.
It is currently reviewing submissions from consumer groups and industry.
ASIC’s August review on direct life insurance sales found firms engaging in sales conduct that created risks of consumers buying products they did not want, could not afford or that did not meet their needs. Select was named as one of 11 firms included in the report.
The regulator committed to a further range of action including enforcement against firms as appropriate and a ban on outbound sales calls which were linked to particularly poor consumer outcomes.
Provider ClearView refunded $1.5 million to 16,000 customers after ASIC found it used unfair and high-pressure sales practices when selling consumers life insurance policies by phone.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.
You can contact her on [email protected].
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