Youi insurance fined $320,000 for misleading sales technique

Youi insurance fined $320,000 for misleading sales techniques

Insurance firm Youi NZ Pty Limited (Youi) has today been fined $320,000 in the Auckland District Court for employing misleading sales techniques when attempting to sell policies to consumers who were seeking a quote.

The Commerce Commission investigated misrepresentations made between July 2014 and February 2016.

Youi pleaded guilty to representing that consumers could obtain a quote online when in fact this was not possible for the significant majority of customers. Instead, they received unexpected telephone sales calls from Youi salespeople seeking to complete the quote and sales process.

“Youi’s website gave the impression that consumers could get a quote online without needing to speak to a salesperson. 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,” Ms Rawlings said.

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Youi admitted that during the sales process some customers were told that their bank or credit card details were required to generate a quote when this was not the case. It also asserted a right to payment for unsolicited insurance policies by sending letters demanding payment and/or debiting consumers’ bank or credit card accounts without their express permission or knowledge.

Some customers also received invoices for unsolicited insurance policies that did not specify that the customers were under no obligation to pay for the policies because they had been unsolicited.

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.

“Our investigation focused on 66 sales calls where complainants alleged they had been misled. In the worst case scenario, Youi was able to attract a customer and obtain their contact details through pretext, set up policies they did not want and then charge them without permission. At the same time Youi made it difficult for them to cancel the policy and get refunded.

“The penalty handed down to Youi in court today serves as a strong reminder to businesses to ensure that customers clearly understand each step of the quotation and sales process and when, and how, they are committed to any purchase. Businesses should also make sure that they have robust compliance programmes to assist their staff to understand their obligations to consumers.”

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