OUTsurance's Youi hooey

For misleading consumers with ambush sales tactics, OUTsurance’s wholly-owned New Zealand subsidiary, Youi, was fined NZ$320,000 (R3.08 million) in the Auckland District Court in December. The NZ Commerce Commission had filed 15 sample charges relating to misrepresentations made to consumers by Youi salespersons between July 2014 (when the insurer opened shop) and February 2016. The South African-owned insurer pleaded guilty to charges that it:

• made false or misleading representations on its website;

• made false or misleading statements during telephone sales calls, including claiming that bank or credit card details were required to generate a policy quote;

• 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; and 

• sent invoices to consumers in relation to unsolicited insurance policies that did not specify that the consumer was under no obligation to pay for the policies.

The Commerce Commission’s investigation was triggered by a series of articles written by investigative journalist Diana Clement for the New Zealand Herald’s online news site Interest.co.nz. While Clement is pleased with the outcome of the investigation, she is not convinced the company has mended its ways.

“Every couple of days someone is complaining on social media about them,” she later told Interest.co.nz.

Her original investigation started with a call to Youi looking for an insurance quote on a motor vehicle. Three minutes into the call, the salesperson claimed falsely that Youi’s computer system couldn’t produce a quote without payment details being entered. Youi went on to debit $592 from her credit card without permission.

As soon as Clement’s article was published, victims started coming forward. Then eight staff members made contact and told how, rather than being a one-off rogue employee, the extraordinary sales methods were used by Youi staff across the company’s South African, Australian and New Zealand offices. The sales methods that they were pressured to use to ambush clients had been schooled into them by managers.

The company continues to sell policies that simply don’t cover the basics. The standard household contents policy, for example, doesn’t include away-from-home cover that is standard with all leading insurers.

Other ways that staff members routinely reduced premiums included that, when certain models of car were expensive to insure, they would say they couldn’t find that model on the computer and suggest they input another (cheaper) model “in the meantime”.

The change meant they would not be covered by the policy should they have to claim. Also, sales staff would often put words in customers’ mouths and then rush on to the next issue, hoping the customer wouldn’t notice they had agreed to include data on their policy that wasn’t true – such as the age they began driving.

One victim found that the Australian-based staff member had entered that her car was garaged at home, even though she had no garage. Had her car been stolen, Youi could have declined the claim.

Keywords: Outsurance Youi New Zealand Insurance Mis-selling
Guilty Misrepresentation Telesales Diana Clement New Zealand Herald
Australia South Africa Sales Methods New Zealand Commerce Commission
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