Youi has been fined $NZ320,000 ($305,529) in the Auckland District Court for engaging in unscrupulous sales practices between July 2014 and February last year.

The South African-owned insurer pleaded guilty to charges filed by the New Zealand Commerce Commission, which investigated the misrepresentations.

Customers were billed for unsolicited policies and told they must provide bank or credit card details to obtain insurance quotes. They were also misled into thinking quotes could be obtained online without consulting Youi sales staff, according to the commission.

“However, in many cases the online query was used by Youi salespeople to make unsolicited sales calls, which in some instances involved the use of unlawful techniques to get a sale across the line,” Commissioner Anna Rawlings said.

“Youi’s offending confused some customers about whether they had obtained a quote or agreed to purchase an insurance policy. They were unsure whether they were bound to pay the invoice they received or whether they could cancel the policy that was issued to them.” 

Youi says it has fully refunded customers who were wrongly billed and has taken steps to clean up its methods. The Insurance Council of New Zealand fined Youi a maximum $NZ100,000 ($95,424) last October for its misconduct.

Parent company Outsurance Holdings says Youi’s Australian business has engaged in similar “sales breaches” and actions have been undertaken to rectify this. The company has been in contact with Australian regulatory authorities over the matter.