The Australian Financial Complaints Authority has ruled against a complainant whose insurer avoided his policy because he lied about his history of drug use.

The authority says the complainant made fraudulent misrepresentations when he applied for the policy with Zurich in February 2013.

His medical records showed he used marijuana regularly and took other drugs such as methamphetamines from at least early 2005 to January 2007, but he answered “no” in a personal statement form when asked if he took or had ever taken drugs or medications on a regular basis. He gave the same answer to another question that asked if he ever used or injected drugs not prescribed by a medical attendant or had received advice, counselling or treatment for drug dependence.

“The complainant’s answers to the insurer’s questions about his history of drug use were false,” the authority said. “His history of drug use was significant. There is no credible reason for his false answers. His answers to the insurer’s questions about drugs were fraudulent misrepresentations.”

Zurich found out about the misrepresentations during investigations after the man claimed for trauma and income protection benefits following a heart attack, dermatitis and reactive stress.

The complainant filled out a form in 2021 after submitting his claim. He said he used marijuana, in reply to a question that specifically asked about that drug, but denied using amphetamines in a follow-up question, despite his medical records suggesting otherwise.

In one medical record dated August 25 2016, a doctor said the complainant used a lot of drugs, including methamphetamines, years ago. In another medical record from 2018, a psychiatrist said the man started using substances about seven to eight years before.

“In the form he completed in 2021 he denied using drugs other than marijuana,” the authority said. “That denial is not consistent with the medical records and the ... panel is satisfied it is false.

“The best evidence of the complainant’s use of drugs is the history recorded by the doctors. He told one doctor he used ‘a lot’ of drugs. A hospital record reports ‘substance use/abuse’.

“Another doctor records that he ‘turned’ to drugs. None of these are consistent with isolated, insignificant or irregular use.”

The authority says Zurich has shown it would not have accepted the policy on the same terms if the misrepresentations were not made, and was entitled to avoid the policy.

Click here for the ruling.