September 10, 2019
ASIC has 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.
The regulator’s action follows Select’s appearance before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Round 4 – Experiences with financial services entities in regional and remote communities).
ASIC alleges that Select, BlueInc and/or IMS, in their dealings with 14 consumers, engaged in conduct in breach of provisions of the Australian Securities and Investments Commission Act 2001 (Cth), 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
Nine of the 14 consumers 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 (Cth) 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 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.