The Australian Securities and Investments Commission (ASIC) has initiated civil penal proceedings against Select AFSL Pty Ltd and associated companies alleging breaches around the telephone sale of life insurance.
The regulator’s action follows on from the issue being raised during Royal Commission.
ASIC said it had commenced civil penalty proceedings in the Federal Court against Select AFSL Pty Ltd (Select), BlueInc Services Pty Ltd (BlueInc), Insurance Marketing Services Pty Ltd (IMS) and director Russell Howden alleging breaches of the law arising from telephone sales of life and accidental injury insurance issued by St Andrew’s Life Insurance Pty Ltd under the brand names ‘Let’s Insure’ and ‘FlexiSure’ during the period 1 February 2015 to 19 March 2018.
ASIC said it was being alleged that Section, BlueInc and/or IMS, in their dealing with 14 consumers, engaged in conduct in breach of the ASIC Act including for some or all of the consumers:
- unconscionable conduct when selling insurance and/or taking payment details over the phone, and when consumers attempted to cancel their insurance policies;
- undue harassment;
- coercion; and/or
- making false and/or misleading representations.
Of the 14 consumers, ASIC said nine lived in remote communities, and many faced 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 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.
Against the companies, ASIC is seeking declarations, civil penalties, injunctions, advertising orders, probation orders requiring the implementation of a compliance program and consumer redress. Against Mr Howden, ASIC is seeking declarations, civil penalties, injunctions and disqualification orders.
The proceedings are to be listed for case management on a date to be determined by the Court.