Unconscionable Conduct When Selling Insurance – Court Finding


The Federal Court has found Select AFSL, BlueInc Services and Insurance Marketing Services engaged in unconscionable conduct when selling life, funeral and accidental injury insurance.

ASIC’s case focused on the mis-selling of insurance over the phone to 14 consumers, 10 of whom lived in remote communities. It noted English was not the first language of many of the consumers, and that some had not fully understand the products being sold to them or that they had even been sold the insurance.

ASIC also noted Select AFSL was the subject of a Royal Commission case study in 2018, in which the regulator found consumers were being harmed by poor sales practices and that Select AFSL’s conduct “…was one of the most egregious.”

…those who made no sales in the morning sessions would be ridiculed

In her judgement, Justice Wendy Abraham noted that sales agents operated in a “…very competitive environment,” and their results were recorded on a leader board, which was visible to all staff. Sales agents who recorded lower sales on any one day would be identified in emails sent to the entire sales floor and those who made no sales in the morning sessions “would be ridiculed, for instance, by being required to wear an inflatable doughnut or by having their chair taken away”.

Justice Abraham said the culture in the call centre was designed to sell more products, and the practices were known to and endorsed by senior management, including sole director, secretary and managing director of Select AFSL and BlueInc Services, Russell Howden. The court found Howden breached his duty of care and diligence as a director.

The court also found that Select AFSL and BlueInc Services provided conflicted remuneration to sales agents in the form of incentives including a cruise to the Gold Coast, a Vespa scooter and trips to Las Vegas and Hawaii.

ASIC Commissioner Sean Hughes said, “In making findings of unconscionable conduct, the Court has emphasised that consumers must have the opportunity to understand and consider the features of the insurance product they’ve been offered. ASIC will pursue those who take advantage of consumers, wherever they are, and including in remote parts of Australia. This case serves as a reminder to insurers to ensure their distributors act appropriately and put the needs of consumers first.

“ASIC is resolutely committed to protecting the most vulnerable consumers where they are targeted by mis-selling. A key driver of Select’s mis-selling was the unlawful sales incentive programs created for the agents, which were condoned by the companies’ managing director,” concluded Mr Hughes.

The court also found Select AFSL, BlueInc Services and/or Insurance Marketing Services contravened the law by:

  • Coercing four of the consumers to sign up to policies by using pressure tactics such as speaking too quickly, rushing through the sales calls and ignoring repeated objections and requests for time by consumers to consider whether they wanted to buy the insurance
  • Unduly harassing five of the consumers by repeatedly contacting them and seeking payment of premiums for a policy they did not want, or could not afford
  • Making misrepresentations to 13 of the consumers about the insurance, including that optional extras formed part of a standard policy when they were an extra cost and that there were no or limited exclusions to the insurance.
  • Failing to act efficiently, honestly and fairly when providing financial services in running its ‘Refer a Friend’ program. This program saw new consumers incentivised to provide contact details for family and friends without their consent. Select’s agents then implied to those people that the referring customer had endorsed Select’s insurance policies. The Court found Mr Howden was also involved in this contravention.

A penalty hearing is yet to be listed by the Court.


  1. Dishing out donuts! At the risk of reactivating horrible memories for some of my fellow advisers who started off in TIED OFFICES, some tactics of some sales managers never change. In my year at one of the majors, there was a list read out every Monday morning, putting the spotlight on those agents who failed to achieve a sale in the previous week. We quickly learned to ” hold over” a sale to avoid any embarrassment on Monday morning. Would have been interesting if there was a death claim over the weekend and the application was still in a desk drawer!

    Years later I moderated an ALA/AFA training course ( remember them?) in an AMP sales office. The resident sales manager went to the extent of having a bright blue dunces cap which was foisted on the head of any adviser who failed to make a sale in the week before, and then had to explain WHY!.

    The only best interest on display in those days related to the 14% override which ended up in the hands of the sales manager on top of his salary.

    Ah, glory days!

    • Hi Oldie, Yep, I’m sad to admit I too recall all those sorts of shenanigans, not with AMP but heard and saw a few things in the rabbit warren through the decades. Being retired now since Nov’22 I sometimes catch myself living in the past a bit more than previous years now I have time on my hands. Amazing what’s in the old memory banks when a proper search is invoked! 🙂 Hope all’s well with you mate. Interesting times ahead for the advisers tuffing it out now that crunch time is here re the final FARCE exam. All the best, cheers!

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