An insurance company managing director has admitted one of his sales staff acted “unconscionably and unreasonably” in signing up an Aboriginal woman to life and funeral policies she already had.



The banking royal commission has heard about a culture at Let’s Insure, a trading name used by Select AFSL, that set staff against each other and used incentives to encourage ruthless, competitive behaviour.



A recording was played at the inquiry in Darwin on Thursday of a Let’s Insure phone salesman convincing Kathy Marika to sign herself, her children and grandchildren up to funeral and life insurance and offering gift vouchers for her handing over family and friends’ numbers.



Despite Marika telling him she was already insured through her employer, he replied that it was common to be signed up to two plans.



The practice of financial entities pushing inappropriate funeral insurance, high-interest loans, bank fees and other products on to Aboriginal people with poor financial literacy has been a feature of this week’s commission hearings.

“In all of those circumstances, was it unconscionable to sell the funeral insurance policy to Ms Marika?” senior counsel assisting Rowena Orr QC asked Select AFSL’s managing director, Russell Howden.



“Yes, it was,” he replied.



However, Howden rejected the suggestion he had “created a situation” for such gross abuse to occur with posters stating “every salesman for themselves”.



That was due to poor training and KPIs and incentive schemes that at one stage included a refer-a-friend program for customers with attached commissions abused by salespeople.

On offer for the company’s top performers were a $300 gift card, a “Pacific Pearl” Sunshine Coast cruise, a $6,000 Vespa scooter and Sunshine Coast cruise.

It was about the same time that the number of Aboriginal people signed up to funeral plans leapt from 430 to 1491 over the course of a year.

Let’s Insure is “remediating” Aboriginal customers, Howden said.

When the corporate regulator, the Australian Securities and Investments Commission, recently investigated, it found 30% of Let’s Insure calls involved inappropriate sales tactics and anti-hawking provisions had been breached.

The salesman who sold to Marika – who was sacked last month, ahead of the royal commission – is believed to have breached laws around providing financial advice.

The Asic investigation caused conflict with Bank of Queensland-owned St Andrews, which provided the Let’s Insure products, over an over-representation of Aboriginal people holding plans and Howden’s refusal to hand over documents ahead of the royal commission.



