This article is more than 2 years old

This article is more than 2 years old

Aboriginal people with poor financial literacy are routinely targeted to buy useless insurance, dud cars and high-interest loans, the banking royal commission has heard.

One company, Clear View Life Assurance, had signed up customers without their consent, a commission hearing in Darwin heard on Tuesday.

Many residents tended towards “gratuitous concurrence” in which they said “yes” and agreed to propositions even when they did not agree, Australian Securities and Investments Commission analyst Nathan Boyle said.

Asic had listened to phone calls involving Clear View and Aboriginal customers after complaints of misconduct that led to it being forced to repay $1.5m and facing a ban.

“What we heard in some of those calls was people being walked through the process of signing up to a funeral or life insurance policy and they were saying ‘yes’ or ‘mmm’,” Boyle said. “We’ve seen consumers that said the telephone representative would ask them, ‘Can you provide us with your bank details?’

“They say, “I don’t want to pay anything’ [and are told], ‘No you won’t have to pay anything now, just provide us with your bank details, yes, OK?’

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“And they provided the details and ended up being signed up to policies they never intended being signed up for.”

Senior counsel assisting the inquiry, Rowena Orr QC, said the royal commission would this week focus on Indigenous people, who often suffered “financial exclusion” and “poorer economic, social and health outcomes”.

Car dealers also targeted Indigenous people with high-interest loans and useless insurance, taking advantage of needing a car in remote communities, said Financial Counselling Australia’s Lynda Edwards.

“Some car dealers will actually drive into communities with trucks with cars on them to sell them when they know that royalty payments are coming into the community,” she said. “Usually these cars then break down within a couple of weeks ... the cars never get fixed.”

Aboriginal and Torres Strait Islander people in remote communities sometimes had a very limited understanding of banking products, the hearing heard.

Boyle described how one matter they investigated involved Aboriginal people being charged 48% interest under a car loan, the maximum legally allowed.