The banking and financial services Royal Commission has unearthed the unethical practices and incentives of life insurers selling policies over the phone at the expense of the most vulnerable customers living in remote communities.
ASIC Indigenous Outreach Program senior policy analyst Nathan Boyle highlighted the rampant practice of signing up customers by being forced into policies they allegedly didn't need or unwittingly signed up for.
Based on listening to several phone calls from ClearView Life Insurance, Boyle alleged staff coaxed customers into providing bank details and enough personal information which then entered them into a contract without knowing, he said.
This is the way "gratuitous concurrence can play out in practice," he added.
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Boyle was referring to ASIC's review of ClearView in February, which used unfair and high pressure sales tactics when selling life insurance direct to consumers over the phone between 1 January 2014 and 30 June 2017.
Of 32,000 life insurance policies sold, 1166 were to consumers residing in areas with high indigenous populations that unlikely spoke English as their first language.
ClearView has since ceased selling life insurance directly to consumers and refunded $1.5 million to thousands of customers as a result of poor sales practices.
The Commission heard the story of Kathy Marika, an indigenous woman who was convinced into buying a funeral insurance policy with Let's Insure (which is owned by Select AFSL) even though she was already covered.
Marika said she couldn't fully understand the representative, who spoke over her and at great length and initially believed was calling about a survey. Ultimately, she said the representative was "forcing" her to sign up to a policy that deducted $60 per month from her account.
"I told them that I didn't want it. I told them I've already had one, but he seemed to be really pushing or asking me to say 'yes,'" she said.
When Marika eventually decided to cancel the policy, she said Let's Insure was relentless with the phone calls.
Senior Counsel Assisting Rowena Orr asked: "And in your statement you say that sometimes they called you day after day and sometimes once a week?"
"Well, they never left me alone," Marika said.
She eventually ran into financial difficulty and sought the assistance of Legal Aid. She told them she could no longer afford the funeral insurance.
In a written response, Let's Insure said it disputes the allegations it didn't act properly and in accordance with the law when it sold the policy.
"However, as an act of goodwill, we will refund all premiums paid on the above policies, currently 40 totalling $1,890.34, subject to your client's authorisation for us to cancel their policies," Let's Insure said.
Select AFSL managing director Russell Howden admitted that in hindsight "we pushed our agents" and this practice was "regrettable."
Some staff members were incentivised with a Vespa scooter and a cruise - which he conceded drove the wrong behaviour.
"We have evolved our commission structure. It was designed to make agents productive but, at all times, the intended outcome was compliant sales," he said.
A Roy Morgan survey released in January found the phone was the most popular means of purchasing life insurance policies.