The Australian Securities and Investments Commission (ASIC) has obtained orders in the Federal Court to stop the selling of two death benefit funds to indigenous communities. It’s the first time the regulator has taken action under the new anti-hawking laws of the Financial Services Reform Act (FSRA).

The court says the funds  – the Aboriginal Community Benefit Fund and Aboriginal Community Benefit Fund No 2 – are classified as financial products under the Corporations Act and should therefore are subject to the anti-hawking provisions of the FSRA.

Greg Tanzer, ASIC’s Executive Director of Consumer Protection and International Relations, says door-to-door selling shouldn’t be used for financial services products because the practice doesn’t allow consumers to compare products.

“It is widely recognised that consumers feel significant pressure to buy products when salespeople attend their homes or workplaces uninvited, which is not the right environment for making informed decisions about complex financial products,” he said

ASIC says it has had trouble before with the funds’ marketing of funeral and life insurance policies to indigenous communities.

The matter will return to court on June 2, where ASIC will apply for refunds to be offered for all those affected.