• QC Rowena Orr has been grilling insurance company managers for the last three days. (Supplied)Source: Supplied
‘Flashy’ incentives for salespeople pushing unaffordable insurance to vulnerable people, and the difficulties of obtaining correct bank accounts in remote areas were the main topics of today's banking royal commission hearings.
Amelia Dunn

5 Jul 2018 - 5:23 PM  UPDATED 5 Jul 2018 - 5:26 PM

The grilling has continued today at the banking royal commission in Darwin, shining a light on the shady practices of Select AFSL, whose company sells Let’s Insure and Flexisure insurance policies.

Rowena Orr QC spent the morning examining Select AFSL Managing Director Russell Howden on how staff incentives resulted in ‘pushy’ and ‘incompliant sales’ to Indigenous customers who couldn't afford their insurance policies.

The commission heard incentives for the call centre staff ranged from $50 Coles gift cards to more extravagant awards such as a Vespa, cruises and a trip to Las Vegas.

While Mr Howden argued incentives were commonplace in sales call centres, he was shot down by Ms Orr, who argued the ways in which non-compliant sales were dealt with were unconscionable.

Sales agents were reportedly “pitted against each other” and told it was “every salesman for themselves” in order to sell more policies.

Corporate regulator ASIC, who dealt with numerous complaints regarding Select AFSL, said this type of competitive, “aggressive” behaviour lead to poor sales practices and misconduct.

"[Do] you accept that this incentive campaign was a contributing factor to the misconduct that led to the spike in funeral insurance sales to Aboriginal and Torres Strait Islander people in 2015?" Ms Orr asked.

Mr Howden reluctantly agreed.

One of yesterday's witnesses, Yolgnu Elder Kathy Marika, was just one of those subject to this type of pushy sales tactics that have allegedly led to misconduct. She received multiple calls from Let'sInsure salespeople - one of them with a foreign accent - offering her funeral insurance, with the aim to win incentives.

Ms Marika said she only understood half of what was being said throughout the call, and that she had to mentally translate what was being said to her native language, Yolŋu Matha. 

Ms Marika called Let's Insure back one week later to cancel her policy because she was struggling to make payments. She told the commission on Wednesday she didn't realise she had signed up for a policy covering her children as well as herself.

Mr Howden admitted that Ms Marika “didn’t want to get that call”, and said the Select AFSL representative “shouldn’t have done that”.

He accepted that this was a “gross abuse” of a salesperson's power, and stated he hopes “an incident like this never occurs in the future.”

Four months to open a basic bank account

On Thursday afternoon, Thy Do, a senior family support worker with aid agency Save the Children took the stand to relay her experience of helping her clients obtain a fee-free bank account with ANZ Bank.

Ms Do’s client had been paying significant ATM, dishonour and overdrawn fees on their bank account, problems that were compounded by living in a remote community one and a half hours from Katherine.

Ms Do told the commission she had originally thought finding a more suitable bank account for her client would be relatively easy, however, she was sorely mistaken.

After multiple trips back and forth to Katherine, Ms Do explained ANZ Bank was still making it difficult for the client and her sister to obtain new, low-fee accounts.

The royal commission heard that it took four months to open the basic fee-free transaction account and that the client still doesn't have access to the account more than six months after her initial request.

Calls for crackdown on 'really pushy' funeral insurance sales practices
Legal Aid and consumer advocacy groups are calling for reform in the private funeral insurance sector, and better services for Aboriginal and Torres Strait Islander families following another day of harrowing evidence at the Banking Royal Commission.

She said the experience was “frustrating” for both her client and herself.

“The last time I opened an account for myself it took me two minutes and I did it on my laptop,” she added.

Those present at the hearing were dumbfounded and left asking why it was so hard for two Indigenous women living remotely to obtain basic fee-free accounts.

Questioning of representatives from ANZ Bank has begun and will continue tomorrow.