CommInsure to refund 30,000 customers over illegal sales campaign
CommInsure will repay up to 30,000 life insurance customers a total of $12 million after pleading guilty to 87 criminal charges.
On Tuesday, the Commonwealth Bank (CBA)-owned insurer pleaded guilty to 87 hawking offences via unlawful and unsolicited telephone calls laid by the Australian Securities and Investments Commission (ASIC).
The charges related to CommInsure’s aggressive use of unlawful phone marketing between October and December 2014, when the insurer enlisted telemarketing firm Aegon Insights to sell its Simple Life policies over the phone using customer contact details from CBA’s database.
“The CBA customers had not requested to be contacted for the sale of Simple Life by CommInsure, or persons on CommInsure's behalf, or to receive marketing information from CommInsure,” ASIC said.
ASIC began investigating the case after flagging a number of issues, including the fact that almost half of the policies sold in 2012/13 were discontinued within six months and that the speed of sales indicated that customers were given inadequate or unclear descriptions of the insurance.
“ASIC is concerned that the way in which these products were sold was manifestly unfair, with customers given insufficient information to make an informed decision,” ASIC deputy chair Daniel Crennan QC said.
The bank told news.com.au most of the 30,000 customers had already been refunded through its remediation program, and the repayments are due to be complete by the end of the year.
Full refunds plus premiums paid and interest are being paid to customers whose policies lapsed within six months, while partial refunds are applied to customers whose policies were cancelled between six and 12 months.
The bank will be sentenced at a later date and faces potential penalties of around $1.8 million.