The mis-selling of life insurance to a man with Down Syndrome, aired in yesterday’s royal commission hearings, raises questions around discrimination in the financial services sector at large.
The royal commission into financial services yesterday heard how Freedom Insurance used cold-call tactics to pressure a 26-year-old man with Down Syndrome into purchasing $100,000 worth of life insurance.
The case highlights a number of issues around the way the financial services sector engages with people with disability, according to senior policy officer at advocacy organisation, People With Disability Australia (PWDA), Sam French.
“I hate to think of how many people with disability are signing up to insurance policies or banking accounts and arrangements where they are really not in a position to comprehend the implications of that, and whether that’s actually going to be of benefit to them,” she told Yahoo Finance.
“It seems the insurance company definitely took advantage of the situation, and while they went through the script that they’re legally required to go through, if it becomes apparent that a person doesn’t understand or fully comprehend the implications of what they’re buying or what they’re purchasing then that shouldn’t proceed,” she continued.
While the airing of such incidents is a good thing, Ms French added there are “many, many other situations” where people with disability are either being taking advantage of or forced into policies they may not understand.
Freedom Insurance claimed their salesman would have been unaware the man he was speaking to had an intellectual disability.
However, Ms French said the onus shouldn’t be on individuals to identify disabilities, but to remove any potential barriers to informed access.
“There is a balance that needs to be met to ensure that people with disability have the same rights as any other citizen to access financial and banking services including insurance,” she said.
At the same time, companies need to ensure their products and practices are designed and monitored to ensure neither intentional or unintentional discrimination occurs.
“Information needs to be made available in appropriate and accessible. The information that a lot of financial institutions put out is very complicated and often can seem to be phrased in a way to sell a product,” she said.
“I understand the incentive for that, however there is definitely a responsibility for those institutions to ensure that their information is in plain English, in accessible format and that there’s adequate time to make a decision – not high-pressure sales over the phone or even in store.”
There’s a difference between having a choice between different products and making an informed decision, she added.
“In this case, the man with Down Syndrome would have benefited from having his father or an advocate present before signing up to anything.”