This article is more than 2 years old

This article is more than 2 years old

The chief executive of an insurer accused of ripping off and misleading Indigenous families by signing them up to expensive funeral plans has no background in insurance or qualifications to do the job, an inquiry has heard.

The chief executive of the Aboriginal Community Benefit Fund, Bryn Jones, who is representing the company at the banking royal commission, was hired by its overseas-based founder and director, Ron Pattenden, who is not himself appearing.

Banking inquiry told Indigenous people exploited by insurance companies Read more

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

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

More than half of ACBF’s plan holders are aged under 25, and the majority are under 18 and were signed up by family.

“You hadn’t worked in the insurance industry at all?” senior counsel assisting the commission Rowena Orr QC asked Jones.

“No I haven’t,” he replied.

“So what were your qualifications?” she asked.

He said: “It was under the premise that I was to try and modernise and bring the appropriate people in that did have the relevant experience and knowledge and know-how to take the company forward.

“I was teaching children sport, and also working within the IT sector.”

Funeral funds scrutinised for targeting Indigenous Australians Read more

Orr asked: “Do you have any qualifications Mr Jones?”

Jones replied: “No, I don’t.”

The commission is sitting in Darwin, where it is examining misconduct by financial companies targeting and exploiting Aboriginal people with insurance, high-interest loans and other products.

On Wednesday, a recording of a telephone salesman for Let’s Insure pushing funeral insurance to an Indigenous woman who already had it was also played at the commission.

In the call, a salesman for Let’s Insure tells Kathy Marika, a 60-year-old Yolngu woman and grandmother from Arnhem Land, that she needs to take out funeral insurance.

Marika tells him she does not need it because she already has funeral insurance with her employer, the Bangarra Dance Theatre.

“Yeah, brilliant ... 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?” the salesman responds. He then offers life insurance and injury cover and persuades her to include her three children.

The salesman then pushes Marika into passing on the phone numbers of her friends and associates, with the promise of shopping gift vouchers, which she never received. Within a week, she 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 $1,890.34.

“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,” Marika told the hearing.

Russell Howden, the chief executive of Let’s Insure’s parent company, Select AFSL, said the phone calls were appalling.

However, he admitted staff were trained to push their insurance on to people with existing cover and the salesman had followed a training manual script that was displayed at the hearing.

Howden said 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.