The Australian Securities and Investments Commission (ASIC) is taking insurance sales companies Select AFSL, BlueInc Services, Insurance Marketing Services and director Russell Howden to court for mis-selling insurance policies to vulnerable customers.

ASIC alleges law breaches involving phone sales of life and accidental injury insurance to 14 customers between February 1 2015 and March 19 2018, involving unconscionable conduct when selling insurance and when customers tried to cancel policies, undue harassment, coercion, and making false or misleading representations.

The case was filed last week in the NSW Federal Court.

Nine of the customers involved were Aboriginal and many didn’t understand what was being sold to them, ASIC says. The agents lied to customers that there were only limited exclusions, that optional extras were in fact standard, and the policies had level premiums, not stepped.

The agents also refused to help the customers to cancel their policies and continually tried to seek payment despite the customers telling the agents they didn’t want the policy. The policies were issued by St Andrews Life Insurance under the names Let’s Insure and FlexiSure.

ASIC says the companies used an incentives scheme to get sales agents to coerce customers into buying the policies, including a Gold Coast cruise, a Vespa scooter and trips to Hawaii and Las Vegas – a breach of the Corporations Act.

ASIC alleges that Mr Howden was intimately involved in the incentives program, and personally arranged for the Vespa to be bought.

ASIC is seeking civil penalties, injunctions, compliance orders and compensation that amounts to millions of dollars. It is also seeking to disqualify Mr Howden from the industry, and civil penalties.

Select was one of the firms included in an ASIC review last year of direct life sales, which found companies pushing policies consumers didn’t want and couldn’t afford, sold without personal advice, and outside group cover. The company was savaged at the Hayne royal commission for aggressively selling insurance to Aboriginal customers.

ASIC has since banned direct phone sales of insurance.