- Commonwealth bank’s life insurance branch, CommInsure, is pleading guilty to 87 counts of hawking charges
- This marks the first big bank to plead guilty to criminal charges after the Banking Royal Commission
- ASIC flagged the breaches in October in relation to a telemarketing firm selling CommInsure’s products unlawfully between 2010 and 2014
- The life insurance branch will refund 30,000 customers $12 million by the year’s end
- CBA’s share price is down 0.24 per cent, currently trading for $80.12 after midday trade
Commonwealth bank’s life insurance branch, CommInsure, has pleaded guilty to 87 counts of hawking charges after using telemarketing tactics to sell its products.
In October, the banking giant was presented with the charges in relation to cold-calling customers – in doing so this breached anti-hawking regulations.
Commonwealth marks the first big bank to plead guilty to criminal charges following the Banking Royal Commission. It also marks ASIC’s first big win in the Commission’s aftermath, which has seen all major banks pay billions of dollars in voluntary remediation charges.
Up to 30,000 customers will be refunded by the bank for a sum of $12 million.
The Australian Securities and Investments Commission (ASIC) detailed in a release today that CommInsure conducted the breaches between 2010 and 2014.
The statement read: “In all of the 87 calls charged, CommInsure did not comply with the requirement to offer the customer the option of having the information required to be included in the Product Disclosure Statement (PDS) for Simple Life read to them prior to the offer to issue or sell the product.”
The life insurance branch commissioned the unsolicited phone calls through the telemarketing agency Aegon Insights Australia. This was when life insurance policies were unlawfully sold over the phone.
“ASIC is concerned that the way in which these products were sold was manifestly unfair, with customers given insufficient information to make an informed decision,” ASIC Deputy Chair Daniel Crennan QC said.
Many customers have already been refunded, and it is expected that all remediation efforts will be completed by the end of the year.
Commonwealth’s share price is down 0.27 per cent, currently trading for $80.12 at 2:35 pm AEDT.