Colonial Mutual Life Assurance Society, also known as CommInsure, has been handed a hefty fine after admitting to cold-calling offences.
The Australian Securities & Investment Commission (Asic) said the firm pleaded guilty to 87 counts of “offering to sell insurance products in the course of unlawful, unsolicited telephone calls”.
Known locally as ‘hawking’.
Between October and December 2014, CommInsure used one of its agents, a telemarketing firm called Aegon Insights Australia, to sell life insurance polices known as Simple Life over the phone.
Copping a plea
The result was a fine of A$700,000 (£366,240, $473,690, €430,047) after the Australian court took into consideration the insurer’s guilty plea.
Had CommInsure not admitted to ‘hawking’, the penalty would have been over A$1.8m.
If the cold-calling offences had taken place after the introduction of legislation in March 2019, however, the firm could have been hit with a fine of nearly A$11m.
CommInsure is a wholly subsidiary of the Commonwealth Bank of Australia (CBA) and gave the bank’s customers’ details to the telemarketing company.
CBA’s clients did not request to be contacted about the Simple Life product, or even agree to receive marketing information from CommInsure, Asic added.
During sentencing, magistrate Atkinson said there is a “significant need for deterrence” and that insurance providers “must ensure that they comply with what is important consumer protection legislation”.
Asic deputy chair Daniel Crennan said: “The conviction and sentence today sends a significant message to the financial services industry.
“The model operated by CommInsure carried risks for consumers due to the unsolicited sale of complex insurance products which consumers may not have needed, wanted or understood.”
Asic opened a consultation on a ban for life insurance hawking over the summer, and won a case against Westpac over pensions cold-calling at the end of October 2019.