Banking royal commission: Freedom staff mocked father who tried to cancel son’s funeral policy

A father trying to cancel a Freedom funeral policy wrongly sold to his disabled son was called a “bloody whinger”.

Call centre staff at Freedom Insurance paid to dissuade customers from cancelling their expensive funeral insurance joked about a father who attempted to cancel cover wrongly sold to his son, who has Down’s syndrome, as a “bloody whinger”, and said his son “sounds not normal”.

Taking the stand for a second day at the royal commission in Melbourne, Freedom chief risk officer Craig Orton faced questions about how his “retention” staff -- paid to convince customers not to cancel their policies -- made “totally inappropriate” jokes about Grant Stewart, who was trying to cancel the policy sold to his 26-year-old son, who has Down’s syndrome.

The inquiry heard Mr Stewart was rebuffed several times in his attempt to have the policy cancelled, that a “retention” agent for Freedom called the father a “bloody whinger” and that his disabled son “sounds not normal”.

In an email between retention staff, one remarked that: “I don’t know what he (the father) expects to get out of it lol.”

The company only buckled to Mr Stewart, a Baptist minister from Melbourne, after forcing him to make his son verbally ask that Freedom “terminate” the policy after several calls, the royal commission heard.

Mr Orton eventually accepted the banter was conduct that fell below community standards, and admitted that it was not appropriate behaviour.

“It didn’t come across the way that I think she (the retention staff member) wanted it to come across,” Mr Orton said.

The royal commission today revealed how Freedom Insurance trapped customers who wanted to cancel their policy by “retaining” the customer when they rang up to end the cover.

Freedom employed a team of 30 staff members whose job was to handle calls from customers sold largely useless insurance and who wanted to cancel it. Their job was to convince them to continue to pay premiums.

Of the almost 40,000 cancellation calls Freedom received over the last financial year -- more than 70 a day -- about half complained they could not afford the cover and a further 28 per cent said they were cancelling because they didn’t want the policy in the first place.

Despite the massive numbers of callers wanting to cancel their Freedom policies, only a quarter of these customers were successful.

“More than two thirds of the people who called to cancel their policy were persuaded to continue their policy without change,” Ms Orr told the commission. “Only a relatively small number are successful in cancelling a policy,” she said.

The data was collected by the Australian Securities and Investments Commission from Freedom in June, but the company failed to attach the findings to documents provided to the royal commission.

“Your retention strategies have been highly successful?” Ms Orr said.

“I agree. I put it down to good customer outcomes,” Mr Orton said. “I think there is difficulty in cancelling that needs to be sorted. It (Freedom) shouldn’t make it so difficult.”

Mr Orton admitted his workers rebuffed the requests of customers, and acknowledged customers had complained that they were told they had to phone - not write to - the company to get their policy cancelled.

Customers complained that policies were not cancelled after requests, that premiums were still being deducted after they had been told the policy was cancelled, and that they were “just hung up on” when they asked for policies to be cancelled.

“The key problem was not taking no for an answer. That is not acceptable,” Mr Orton said.

Mr Orton agreed that call scripts given to workers made them ply customers with “an intrusive and inappropriate line of questioning” to dissuade them from cancelling policies.

Mr Orton said the company “absolutely” plans to stop the retention strategies.

Freedom’s Craig Orton leaves the inquiry. Pic: AAP

The royal commission earlier revealed how sales staff at Freedom, which ran a number of high-pressure outbound call centres, pushed tens of thousands of policies on unsuspecting customers, and were driven to sell “frantically”.

Prizes for staff included luxury trips to Bali, cruises on Sydney Harbour and Vespa scooters after competitions that ­pitted employees against one another, despite a ban on conflicted remuneration.

Mr Orton admitted Freedom agents’ behaviour constituted a breach of the Corporations Act’s requirements to provide services efficiently, honestly and fairly, to ensure representatives complied with financial services laws, and to ensure representatives were adequately trained and competent to provide financial services.

The low value of the company’s policies also came under the spotlight, as customers could not claim on accidental death cover in cases of criminal activity, terrorism, motorised sport or travelling by helicopter.

Few customers ever claimed on the policies — just 22 claims were made last year from 21,079 policies sold. Meanwhile, the company paid out claims as low as 14c in every dollar it brought in through revenue.