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CBA pleads guilty to criminal breaches

By Cameron Micallef · November 20 2019
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egg

Invest

CBA pleads guilty to criminal breaches

By Cameron Micallef
November 20 2019
Reading:
egg
CBA

CBA pleads guilty to criminal breaches

author image
By Cameron Micallef · November 20 2019
Reading:
egg
CBA

The Commonwealth Bank has pleaded guilty to 87 criminal charges of “hawking” life insurance through unsolicited phone calls. 

The Colonial Mutual Life Assurance Ltd, trading as CommInsure between October and December 2014, unlawfully sold life insurance policies known as Simple Life over the phone through its agent, telemarketing firm Aegon Insights Australia.

According to an ASIC statement, CommInsure provided customer contact details to Aegon from CBA’s existing database, without the CBA customers’ request to be contacted for the sale of Simple Life insurance.

“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,” ASIC stated.

In 14 of the calls charged, CommInsure also failed to meet the requirements to:

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  • give the customer a PDS before becoming bound to acquire Simple Life; and
  • clearly inform the customer of the importance of using the information in the PDS when making a decision to acquire Simple Life.

The Commonwealth Bank of Australia sold CommInsure to Hong-Kong listed AIA Group for $3.8 billion in 2017.

While not directly related to the royal commission, the sale followed the commission finding that CommInsure ignored medical advice of doctors to use outdated medical definitions, which led to the rejection of claims by policyholders.

This matter is being prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral of a prosecution brief by ASIC.

CommInsure will be sentenced at a later time.

In a statement to the ASX, the Commonwealth Bank acknowledged the charges.

CBA pleads guilty to criminal breaches
CBA
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About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

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About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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