A company accused of playing on the significance of funerals in Aboriginal culture to sell insurance policies for children faces the possibility of criminal charges.
Barristers assisting the banking royal commission have recommended a number of potential misconduct findings against the Aboriginal Community Benefit Fund, including some where criminal penalties apply.
Gold Coast-based ACBF has “aggressively” targeted Australia’s Aboriginal and Torres Strait Islander people but it is not an Aboriginal organisation, nor affiliated with any indigenous or government organisation.
Senior counsel assisting the commission Rowena Orr QC said in Darwin on Friday ACBF’s products and services were not, in fact, tailored to meet the needs of indigenous people or beneficial to them.
“It is open to find that ACBF plays on the cultural significance of funerals to Aboriginal and Torres Strait Islander people and indigenous mortality statistics to actively sell its policies to children or young people in those communities in circumstances where they have little need for the product,” she said.
Ms Orr said the design of the ACBF plan also meant policy holders may pay more in premiums than they ever will be entitled to receive.
She said the company’s advertising materials may induce consumers into thinking it is an Aboriginal-owned company by using colours and imagery significant in Aboriginal culture.
Ms Orr outlined a number of possible findings against ACBF, including for misleading conduct.
Some of the sections of the Australian Securities and Investments Commission Act she referred to carry criminal as well as civil penalties.
One section, which prohibits conduct liable to mislead the public about the nature and suitability of financial services, carries a maximum fine of $420,000 for an individual and $2.1 million for a company.
ACBF has 13,500 funeral plan holders, about 4900 of which are for children and another 2000 for people aged 18 to 25.
Ms Orr said the company’s remuneration and bonus scheme actively encouraged its sales staff to aggressively target vulnerable people, incentivising them to pursue signing up entire families including infant children.
Counsel assisting also outlined possible misconduct findings against another insurer Select AFSL, including for breaching corporate laws by providing personal advice when selling funeral insurance to an indigenous woman.
The ANZ bank was also criticised as the commission’s two-week hearing into farming finance and financial issues affecting indigenous Australians wrapped up.
Ms Orr suggested commissioner Kenneth Hayne QC could find ANZ engaged in misconduct by breaching banking code obligations after charging customers high rates of interest and fees for informal overdrafts they did not request.
If customers went more than $50 into the red on their transaction accounts, they could be charged 17 per cent interest on the overdrawn amount as well as a fee of $6 a day up to a maximum of $60 a month.
“It’s open to find that the misconduct and conduct that fell below community standards and expectations was attributable to a culture that was inadequately concerned with placing customers in the most appropriate product and more concerned with revenue enhancement,” Ms Orr said.
“By granting informal overdrafts on an opt-out rather than an opt-in basis, including to accounts held by low income earners, ANZ prioritised its own position over that of some of its customers.”