Over a week of scandalous revelations, the banking royal commission has heard how Aboriginal Australians were routinely targeted

The phone calls made for excruciating listening. Yolngu woman Kathy Marika, a 60-year-old grandmother from Arnhem Land, was repeatedly firm: she did not want to buy funeral insurance. She was already covered, she said, through her employer, the Bangarra Dance Theatre.

“I can’t do it again, you know, I can’t have two.”

But the caller – a salesman for Let’s Insure – would not take no for an answer.

“Yeah, brilliant,” he said – by now on a third call – when Marika declined. “Now the reason why people take one out with us as well as the one that they have at work is because we’re priced up to 50% less and, as can you imagine, you don’t really want to be spending too much, do you?”

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The salesman continued to push a life insurance policy and injury cover, persuading Marika – speaking in her second language and hampered by hearing difficulties – to also include her three children.

“Definitely don’t want to be paying too much, hey?” he said.

As well, he used phrases designed to invoke “fear of loss”, as he had been trained in company manuals: “As you can imagine, serious injuries, they can happen to anyone in the family”; “It costs a lot for an ambulance nowadays doesn’t it?”; “When you pass away, Kathy, the bills still carry on, don’t they?”

Later that month, the same agent called again, pressuring Marika to pass on the names and contact details of friends and neighbours, with the promise of shopping gift vouchers.

Facebook Twitter Pinterest The web page of Let’s Insure. The banking inquiry has heard how a salesman for the company continued to push Kathy Marika to take out policies against her wishes. Photograph: Mick Tsikas/AAP

He said: “Yeah, well, if you want to have a look through your phone book, look, um, I’ll just take down everybody’s name and number, and could ring them all today, and then you never know, if you’ve got like 30 of them, you get $600!” No vouchers arrived.

Marika later tried to cancel the policy, but was persuaded not to and given one free month. She took legal action and more than a year later was refunded nearly $1,900.

Appearing before a hearing of the financial services royal commission, sitting in Darwin, Marika said she felt harried into agreeing.

“I told them that I didn’t want it, I told them I already had one, but he seemed to be really pushy for me to say yes,” she said.

Over another week of scandalous revelations, the royal commission heard Indigenous Australians with poor financial literacy are routinely targeted with sales pitches for valueless insurance, sold faulty cars at usurious interest rates and wrongly charged thousands of dollars in illegal fees.

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The commission, before Justice Kenneth Hayne, heard companies pressured Aboriginal people into taking out life and funeral insurance even if they were already covered, or into taking out expensive funeral insurance for babies and children.

Appearing before the commission and listening to recordings of his firm’s calls was Russell Howden, the chief executive of Let’s Insure’s parent company Select AFSL, who agreed the calls to Marika were “terrible” and “appalling”.

“We never ever sanctioned aggressive sales tactics,” he said.

However, Howden was then forced to concede staff were trained to push their insurance on to people who already had existing cover and that the salesman heard on the call had followed a training manual script written by the company. Displayed at the hearing, the manual included instructions to use “fear of loss” to persuade customers to sign up.

Howden insisted the company did not directly target Indigenous people for funeral plans, but statistics showed the number of Indigenous Australians on its books had soared in recent years.

Another company, the Aboriginal Community Benefit Fund (ACBF), was alleged to have falsely represented itself as an Indigenous company, containing images of the rainbow serpent, and Aboriginal families and art on its materials.

Yorta Yorta woman Tracey Walsh, from central Victoria, told the commission she was led to believe she was dealing with an Indigenous company, and that the product she had bought was a savings plan, in which her money was put away for a funeral. She said she was horrified to discover she would lose her benefits if she missed any payments.

She had paid $36 a fortnight for more than a decade – more than $10,000 all up – for a maximum benefit of $8,000. She was told she would receive nothing if she stopped making payments.

“I felt like they had me over a barrel,” she told the commission. “People haven’t been told the truth about these policies. I’ve got elders that have been in these funeral funds for years and they plan to give the money to their families so they can survive.”

Facebook Twitter Pinterest Yorta Yorta woman Tracey Walsh told the commission she was led to believe she was dealing with an Indigenous company. Photograph: Glenn Campbell/AAP

ACBF only settled with Walsh this year, after it found out she was due to give evidence to the royal commission.

ACBF already had a reputation for aggressively selling to Aboriginal people, including children, for whom the funeral and the rituals associated with death are a major cultural and community event.

It was previously found to have breached corporate anti-hawking laws in the federal court.

The Gold Coast-based private business had been pursued by the corporate watchdog for years through the courts over its aggressive selling almost exclusively to Aboriginal people and falsely presenting itself as an Indigenous corporation, the commission heard.

ACBF would deduct money from Centrelink payments before people received them – an activity since made illegal – and deny payouts for suicides. Aboriginal youth suicide rates are the highest in the world.

Senior counsel assisting the commission, Rowena Orr QC, told the hearing that of ACBF’s 13,000 policies, nearly 5,000 were to children and another 2,000 to people aged 18 to 25.

ACBF’s chief executive, Bryn Jones – who conceded under forensic questioning that he had neither qualifications nor experience in the insurance industry – said in evidence that the company did not target children and that the high number of youths and minors with policies reflected the high mortality rate among Aboriginal people.

Asked how he got the job, he said his father organised for him to have coffee with the company’s Vanuatu-based founding director, Ron Pattenden.

“He banks with my father,” Jones told the commission.

Orr said it was open to the commission to recommend criminal charges against ACBF for misleading conduct.

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

“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 had limited understanding of banking products, the hearing heard.

Australian Securities and Investments Commission analyst Nathan Boyle described a culture of predation by financial services companies that sought to exploit a tendency of residents in Indigenous communities to agree to propositions with which they didn’t actually agree, referred to as “gratuitous concurrence”.

Asic had listened to phone calls between ClearView Life Assurance staff and Aboriginal customers after complaints that it signed up customers without their consent. The misconduct complaints have led to ClearView 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?’

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

Boyle described a separate matter investigated by Asic where Aboriginal people were charged 48% interest on a car loan, the maximum rate legally allowed.