Commonwealth Bank of Australia (CBA)’s life insurance arm CommInsure has been charged with 82 breaches of cold-calling law, and is facing a fine of up to AUD $1.8 million ($1.2 million), after it hired a telemarketing company to sell its customers a life insurance product, according to Fintech Futures.
The Australian Securities and Investment Commission (ASIC) is cracking down on firms abusing its anti-hawking laws. The regulator is accusing CBA of hiring Aegon Insights to call its customers and sell them the bank’s ‘Simply Life’ insurance policy.
The bank, valued at AUD 136 billion ($92 billion), is also being charged with failing to present full details of the product disclosure statement to potential customers, which set out the benefits and costs of the insurance product. Each breach equals to an estimated AUD 21,250 ($14,374)
“It’s going to be a test case to see if they can actually get through one of the more egregious complaints of the Royal Commission,” says finance senior lecturer at University of Sydney Business School Andrew Grant, speaking to Reuters.
The charges follow ASIC’s announcement of a Royal Commission inquiry in July, which said the regulators planned to prosecute the country’s top lenders for overly aggressive sales practices. Another CBA division, Colonial First State, has previously been charged with committing more than 15,000 crimes for not moving customers from high-fee accounts to low-fee ones.