Youi is a relatively new entrant in Australia’s car and home insurance market.
Youi is a relatively new entrant in Australia’s car and home insurance market.

Sunshine Coast giant Youi’s $164K penalty

INSURER Youi has shelled out $164,000 after Australian customers were signed up to policies without their permission, coming after paying almost $400,000 across the Tasman for similar dodgy sales techniques.

The payout announced on Wednesday represents refunds of $14,000 to 102 consumers.

Sunshine Coast-based Youi, owned by South Africa's Outsurance, is also paying $150,000 to the Financial Rights Legal Centre's Insurance Law Service as a "community benefit".

"Youi is disappointed a small number of our customers had an unsatisfactory experience and we sincerely apologise to those customers," Youi's new CEO Frank Costigan said.

The Australian Securities and Investments Commission said Youi had since a review changed its pay structure "and reduced the incentives provided to sales staff based on sales volumes".

Youi said other new measures to prevent wrongdoing include boosting its risk and compliance oversight, and staff training.

The problems were first aired in New Zealand and then came under investigation in Australia. By 2016, Outsurance's own accounts confessed NZ staff had signed up customers to policies without their consent, and that Youi Australia "has experienced similar sales breaches as the two businesses share common call centre infrastructure".

Youi was hit with a $NZ100,000 ($A95,000) fine by the Insurance Council of New Zealand and the another $NZ320,000 fine after NZ's Commerce Commission extracted a guilty plea in court for offences committed between July 2014 and February 2016.

Comment has been sought from ASIC about why it did not engage in similar legal action here.

Aside from the fines, the scandal also hurt Youi's business. Since starting in Australia in 2008 the company had experienced rapid growth but the negative headlines helped cool that expansion lately.

In latest results, Youi's growth was actually below that of major rivals Suncorp and IAG. Its gross written premiums, which measure customer and price changes, fell 0.6 per cent to $664 million.



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