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Banking royal commission: Insurer admits ‘unconscionable’ sales conduct

Banking royal commission: Insurer admits ‘unconscionable’ sales conduct

AN INSURANCE company chief executive has admitted one of his sales staff acted “unconscionably and unreasonably” in signing up an Aboriginal woman to life and funeral policies she already had.

The banking royal commission has heard about a culture at Let’s Insure, a trading name used by Select AFSL, in which staff were “pitted against each other in battle” and given incentives that encouraged ruthless behaviour signing up indigenous people to funeral and life insurance.

A recording was played at the inquiry in Darwin of a Let’s Insure phone salesman convincing Kathy Marika to sign herself, her children and grandchildren up to funeral and life insurance and offering gift vouchers for her handing over family and friends’ phone numbers.

Despite Ms Marika telling him she was already insured through her employer, he replied that it was common to be signed up to two plans.

Let’s Insure is the second insurer along with the Aboriginal Community Benefit Fund to be examined in Darwin this week for predatory behaviour in relation to the finances of indigenous people, including children, along with other financial products and companies.

“In all of those circumstances, was it unconscionable to sell the funeral insurance policy to Ms Marika?” Senior Counsel assisting Rowena Orr QC asked Select AFSL chief executive Russell Howden.

“Yes, it was,” he replied, admitting the company was guilty of misconduct.

A company poster from the time stated it was “every salesman for themselves” in a battle in which top salespeople could win a Sunshine Coast cruise and a $6000 Vespa scooter.

Mr Howden rejected the suggestion he had “created a situation” in his workplace for the behaviour of the salesman — sacked last month, three years after the event — which included illegally giving financial advice.

In the same year, 2015, the number of Aboriginal people signed up to funeral plans leapt from 430 in 2014 to 1491.

Let’s Insure is “remediating” Aboriginal customers and no longer selling funeral insurance, Mr Howden said.

When corporate regulator ASIC recently investigated, it found 30 per cent of Let’s Insure calls involved inappropriate sales tactics, and anti-hawking provisions had been breached.

This article was first published by
Last modified onThursday, 05 July 2018 22:57

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