SUNSHINE Coast-based insurance giant Youi has been fined again, this time a whopping $300,000, for its misleading sales techniques in New Zealand.
This fine, handed down in the Auckland District Court on Thursday, December 15, was the second hefty penalty received across the Tasman for dodgy sales practices reported between July 2014 and February 2016.
Earlier this year, Youi was fined $95,000 by the Insurance Council of New Zealand, its maximum penalty, for misleading sales techniques when attempting to sell policies to consumers seeking a quote.
The latest fine came after Youi pleaded guilty in court to the same 15 charges in court and concluded the matter.
The Commerce Commission investigated misrepresentations made between July 2014 and February 2016.
Commissioner Anna Rawlings said Youi's offending confused some customers about whether they had obtained a quote or agreed to purchase an insurance policy.
"Our investigation focused on 66 sales calls where complainants alleged they had been misled," Ms Rawlings told other media.
"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 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."
The investigation was sparked by New Zealand journalist, Diana Clement, who investigated the company after her personal experience of seeking a quote, then finding her Visa card debited without her permission.
Youi apologised for the practices soon after the investigation came to light and said it would plead guilty to the charges.
Youi CEO Danie Matthee took the Daily on an exclusive tour of the company headquarters in September to show how it had cleaned up its act.
And as soon as the court finding was handed down on Thursday, Youi issued a statement saying it accepted the court findings and the fine on Fair Trading charges "for errors the company made in relation to its website and sales processes".
Youi again publicly apologised and said it addressed the issues the Commission investigation raised and has "already restructured systems, processes and employee incentives to improve customer service".
Youit has fully refunded all customers to whom policies were inappropriately issued from July 2014 (when Youi started its business in New Zealand) to date.
The number of customers affected was less than 0.2% of policies issued for the same period.
Mr Matthee said the sentencing hearing concluded the Commission investigation and now Youi was "looking forward to continuing to provide much needed competition in the New Zealand insurance market".
"While this behaviour was never condoned by the company, we have acknowledged that errors were made and that even one error of this nature was too many," Mr Matthee said.
"We cooperated fully with the Commerce Commission which acknowledged our cooperation, remorse and remedial steps.. We are confident that our restructured systems and processes mean the issues won't happen again.
"Our focus now is to continue to grow our New Zealand business and provide awesome service to our 50,000 plus customers, thousands of whom have had their say and posted feedback on the Youi Wall (www.youi.co.nz/wall) which reflects an overall customer satisfaction rating of 91%.
"We are also committed to the almost 400 Kiwis we employ locally, and the broader insurance market where Youi provides much needed product differentiation and price competition."
The investigation only took place in New Zealand as there have been no reports of a similar probe in Australia.
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