Calls for crackdown on 'really pushy' funeral insurance sales practices

Legal Aid and consumer advocacy groups are calling for reform in the private funeral insurance sector, and better services for Aboriginal and Torres Strait Islander families following another day of harrowing evidence at the Banking Royal Commission.

Kathy Marika at the third day of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Darwin. Source: Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry

Yolŋu woman Kathy Balngayngu Marika told the commission on Wednesday that she was subject to 'really pushy' sales tactics and found it difficult to understand what she was being signed up for when insurance company 'Let's Insure' called her in 2015. 

The commission heard excerpts of phone calls between Ms Marika and salespeople at the Let's Insure company pushing funeral insurance. One call was with a man with a British accent who consistently spoke over the top of Ms Marika, allowing little time for her to respond.  

Ms Marika said she only understood half of what was being said throughout the call, and that she had to mentally translate what was being said to her native language, Yolŋu Matha. 

“Our culture is for the young people to listen to what the old people are saying. Let us think, let us come up with the answer... But this one was just ‘talking talking,’ didn’t give me time to talk, or to think," Ms Marika said. 

Ms Marika called Let's Insure back one week later to cancel her policy because she was struggling to make payments. Ms Marika told the commission she didn't realise she had signed up for a policy covering her children as well as herself.

The sales representative told Ms Marika they would give her one free month to help her get back on her feet, instead of cancelling her policy. Ms Marika was only able to cancel her policy after Legal Aid stepped in and wrote a letter to Let's Insure. Her premiums were also refunded.

The evidence has prompted Legal Aid groups in Victoria and New South Wales and the Victorian Aboriginal Legal Service to call for reform in the sector and 'more suitable products for Aboriginal families'. 

Legal Aid NSW CEO Brendan Thomas said funeral insurance was an 'unsuitable product' that targets the most vulnerable in the community.

“There should be an obligation on insurers to assess whether or not the product is suitable," he said in a statement. 

“And there should be mandated disclosure on the likely costs of premiums compared to the value of the funeral."

Mr Thomas said the time for action was 'now'. 

The managing director of Select AFSL, which trades under Let's Insure and FlexiSure, gave evidence to the Royal Commission on Wednesday afternoon.