Funeral insurance company Let’s Insure, a trading name used by Select AFSL, is under the spotlight at a royal banking commission hearing, at which it has been grilled about its alleged culture of setting staff against each other and using incentives to encourage ruthless, competitive behaviour.
This week’s commission hearings placed the focus on the practice of financial entities in pushing inappropriate funeral insurance, high-interest loans, bank fees, and other products to aboriginal people with poor financial literacy.
In a hearing in Darwin on Tuesday, the inquiry heard a recording of a Let’s Insure phone salesman convincing Kathy Marika to take out life and funeral insurance for herself, her children, and grandchildren and offering gift vouchers for her handing over family and friends’ numbers, The Guardian reported.
Even after the salesman was told that Marika was already insured through her employer, he replied that it was common to be signed up to two plans.
“In all of those circumstances, was it unconscionable to sell the funeral insurance policy to Ms Marika?” Rowena Orr, senior counsel assisting, asked Russell Howden, Select AFSL’s managing director.
“Yes, it was,” Howden said, but denied the suggestion that he had “created a situation” for such “gross abuse” to occur with posters stating “every salesman for themselves.”
The sales misconduct was attributed to poor training, KPIs and incentive schemes that, at one stage, included a refer-a-friend program for customers with attached commissions that were abused by salespeople, the report said.
The company’s top performers were offered a $300 gift card, a “Pacific Pearl” Sunshine Coast cruise, and a $6,000 Vespa scooter. It was around this time that the number of funeral plans sold to aboriginal people jumped from 430 to 1,491 over the course of the year.
In its recent investigation of Let’s Insure calls, corporate watchdog ASIC found that 30% of the calls
involved inappropriate sales tactics and the breach of anti-hawking provisions.
The salesman who sold to Marika, who was terminated last month, ahead of the royal commission, is believed to have breached laws around providing financial advice.
Meanwhile, Howden said Let’s Insure is “remediating” aboriginal customers, The Guardian reported.