The Colonial Mutual Life Assurance Society Limited has been fined $700,000 for breaching anti-hawking rules. .
The Colonial Mutual Life Assurance Society Limited, trading as CommInsure, a wholly owned subsidiary of the Commonwealth Bank of Australia (CBA), has been fined $700,000 for breaching anti-hawking rules.
The insurer plead guilty to 87 counts of offering to sell insurance products in the course of unlawful, unsolicited telephone calls, in breach of s992A(3) of the Corporations Act (2001) at an earlier court date.
The illegal conduct involved CommInsure providing telemarketing company Aegon Insights Australia Pty Ltd with customer contact details from CBA’s existing customer database for the purposes of selling a policy known as Simple Life. The customers had not requested to be contacted for the sale of Simple Life, or persons on CommInsure’s behalf, or had opted in to receive marketing information.
In some cases CommInsure also failed to provide customers with product disclosure statements before signing onto the insurance, and failed to inform them of the importance of using the information in those statements when making their purchasing decisions.
In delivering the sentence, Her Honour Magistrate Atkinson of the Downing Centre Local Court in Sydney said there is a “significant need for deterrence”, and that those who market and sell insurance products “must ensure that they comply with what is important consumer protection legislation.” The sentence takes into account CommInsure’s early guilty plea to the charges, which carried a maximum total penalty of $1,848,750.
“The conviction and sentence 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”, said ASIC Deputy Chair Daniel Crennan QC.
This matter was prosecuted by The Office of the Commonwealth Director of Public Prosecutions after an investigation and referral of a brief of evidence by ASIC.
The case represents the first criminal proceeding brought by ASIC in the wake of the Hayne royal commission.