'Free funeral insurance for a year': pensioner gets refund after cold-call con

A pensioner will be repaid premiums for funeral cover that he was talked into buying over the telephone by a company acting on behalf of Nobleoak Life.

The man was told in December 2016 he’d won a competition and his prize was 12 months’ free cover. He purchased the cover but later complained to the Australian Financial Complaints Authority (AFCA).

The conduct of the cold-calling company, which AFCA refers to as Company F, was a case study in the Hayne royal commission in 2018. Company F is no longer operating and the insurer agreed to remediate disadvantaged customers.

The complainant’s case was assessed by the remediation program but no refund or compensation was awarded, so he complained to AFCA.

AFCA says the cold-call was unsolicited and the reference to a competition “was not true because he had not ‘won’ anything, but was rather the target of a telemarketing campaign aimed at selling him a product”.

“It is evident from listening to the recorded call that the complainant was not expecting the call, and did not fully understand what was being offered to him,” AFCA said.

Key product features were not explained during the call and while a welcome letter and product disclosure statement were later sent to the complainant, AFCA says “this disclosure and conduct after the sale was inadequate to cure the lack of disclosure of the ongoing premiums during the sales call”.

AFCA says the remediation program decision against a refund is “not determinative” and the complainant is entitled to an external review.

It ruled the insurer should refund premiums paid up until August 17, 2021. It says a telephone call between the complainant and the insurer on that date shows that the complainant would then have been “reasonably aware” of the amount of the premiums charged.

The complainant argued the conduct of the insurer and Company F caused him stress and affected his mental health, but AFCA decided he is not entitled to compensation for non-financial loss.

“I accept that the complainant has experienced some stress from having realised that he has paid expensive premiums for some years for a product he did not solicit and may not have properly understood, and is unable to afford to keep paying the premiums to keep the product on foot, nor to be able to realise value from it in future,” the AFCA ombudsman said.

“However, I am not satisfied the insurer conducted itself in a manner that warrants compensation. I consider that the insurer treated the complainant respectfully and made numerous attempts to contact him and try to resolve his concerns once they were aware he was dissatisfied.”

Click here to read the full ruling.