The banking royal commission has heard shocking evidence of a life insurance policy being sold to a man with Down syndrome and only reluctantly being cancelled.
Grant Stewart appeared on the second day of the royal commission’s sixth hearing which focuses on insurance to describe his son’s trauma after more than $100,000 of insurance was sold to him over the phone while he was home alone.
A recording of the call (audible in the video below) was played exposing how a salesperson representing life company Freedom Insurance managed to sign the man up to three policies including accidental death and injury, as well as a final expenses cashback policy.
The call, made in 2016, is fraught with long pauses and at one stage Stewart’s son, whose name has been withheld, says he needs to go, only to be instructed to stay on the line so direct debit details can be arranged.
“He was quite distressed about it,” Stewart told counsel assisting the royal commission Rowena Orr QC.
“He believed he had done something wrong and was embarrassed and didn’t know what it was that he had done.”
Stewart said his son, who has been diagnosed with a moderate intellectual disability, was in no position to comprehend those policies or the sales call.
“I was, yes, quite disturbed by the whole process because I really didn’t think during the call that our son indicated any understanding of what he was signing up for, or why the information was wanted,” Stewart said. “He was being compliant and trying to be polite but didn’t understand.”
Insurance for life
Despite Stewart contacting Freedom Insurance immediately after he realised what had happened, he found the insurer reluctant to cancel the policy.
Instead he was told that a representative of the company would call him back.
That return call never happened, nor did Stewart receive a response to an email he later sent to Freedom’s head of operations.
Stewart instead was forced to make another call, during which he was continually placed on hold as Freedom representatives discussed what to do.
Having been told he was being transferred to the cancellation department, he instead found himself talking to someone from retention, who extolled the benefits of the policy to Stewart despite his insistence that he wished to cancel it.
They also maintained that it was free for the first 12 months, a claim Stewart disputes.
“I didn’t think that was the case because there were already some benefits that were going to be deducted for some amounts,” he said.
After being put on hold again, Stewart was told he would have to send an email.
When he said he already had two days prior, he was told that his son would be required to say the words “I wish to terminate the policy” on the phone.
In the phone call the man can clearly be heard stammering and struggling with his words, despite Freedom Insurance’s insistence that a salesperson could not be aware of Stewart’s son’s condition.
“He found it difficult to articulate the words, let alone understand what they meant,” Stewart said.
He was finally told the policy would be terminated.
Serial selling tactics
The story raises serious question marks over dodgy sales tactics within the life insurance industry.
Stewart said that the original sales call had not been fair to his son, believing the salesperson shared no concern for the customer.
“I just thought he had a script in front of him and he was asking the questions he needed to be asked until he got the answers that he wanted,” Stewart said.
The commission was told that the agent had a chequered record, having received multiple complaints and warnings during his tenure as well as being praised by Freedom for “smashing over 200 lives and earning amazing commissions”.
Having reviewed his case file, Freedom’s chief operating officer admitted that it was clear the salesperson should not have been working prior to the call to Stewart’s son.
“I believe he should have been terminated by this stage given the quality,” Craig Orton said from the witness box.
He also apologised publicly to both the victim and his father:
“Mr Stewart, to you and your son, I sincerely apologise for that – your son had to be put through that, and you have that from the bottom of my heart. It should not have occurred.”
Internal emails within the sales department during the period have also emerged, labelling Steward a “bloody whinger” and saying that his son “sounds not normal”.
The commission also heard that while Freedom receives 72 cancellation calls a day, the retention department manages to avert 85 per cent of these.
Here are some of the reactions from followers on Twitter:
Insurance companies displaying predatory behaviour on the most vulnerable in our community. Sickening! #bankingRC
— Louis Schetzer (@Schetz1) September 12, 2018
Can’t believe what am I hearing.. When a customer wants to cancel a policy with Freedom, the retention agent is asked to ask the customer what plans they have once there insurance is cancelled…intrusive! And Offensive. Shameful. What are we dealing with?#Bankingrc#Banksrc
— Stacey (@Justiceiscomin7) September 12, 2018
Some customers have complained that when they tried to cancel their Freedom Insurance policies that staff simply hung up. Well that’s certainly one way to retain customers… #bankingrc pic.twitter.com/XyKyPEhesO
— Katherine Temple (@Katherine_M_T) September 12, 2018