Thousands of Australians have fallen victim to the fraudulent sales tactics of representatives of American-owned company Combined Insurance, alleges a former employee.
In a Fairfax Media report, whistleblower Alison Moore – an employee of the insurance company between 2003 and 2014 – has claimed there is an “endemic and entrenched” culture of “churning”, “twisting” and “overloading” by agents in the company.
These practices have seen thousands of Australians, among them pensioners and the disabled, being sold insurance policies that they will never be able to make a claim on.
It is also alleged that Combined Insurance has facilitated a practice called “tomb-stoning” in which agents sign up dead or non-existent clients and then secretly pay for their initial premiums in order to pocket the commissions.
Ms Moore also alleged that some “senior management of Combined Insurance” are aware of the practices and even support “fraudulent applications for insurance” sold by certain agents in order to increase sales.
“I allege Combined's audit department inexplicably fails to detect vast numbers of fraudulent applications/sales made by these agents despite being alerted,” Ms Moore said.
Ms Moore revealed to Fairfax Media that she approached the corporate regulator in late 2013 about her concerns.
Her complaint to ASIC alleged that certain agents “have been and still are being paid commissions for upgraded sales to existing clients” despite the questionable practices they have been sold under.
Fairfax Media also reported that ASIC has launched a major investigation into the practices of Combined Insurance.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 18 Feb 2019ASIC appeals Westpac best interests court decisionBy Adrian Flores
- 18 Feb 2019FASEA mostly funded by the major banksBy Adrian Flores
- 15 Feb 2019ASIC to undertake harsher penalties against banksBy Eliot Hastie
- 18 Feb 2019NAB most distrusted bank, survey findsBy Sarah Simpkins
- 15 Feb 2019Court restrains unlicensed firm from operatingBy Adrian Flores
- 15 Feb 2019ASIC used Dover whistleblowing to shut licensee downBy Adrian Flores
- view all