It offers payouts of up to $15,000 with premiums paid annually, and promises fast payouts, usually within 24 hours of lodging a completed claim.
The Australian Spam Act prohibits sending unsolicited commercial electronic messages.
Some of the recipients of the emails who have raised concerns with The Age and The Sydney Morning Herald include Gerard Brody, the chief executive of Consumer Action Law Centre, who says the campaign highlights the inadequacies in current laws.
“As soon as one high-pressure sales tactic is banned, like outbound phone sales, the industry simply moves to another. That’s why we need robust and effective bans on all forms of unsolicited selling, including emails and online. Otherwise, our corporate cop … will be stuck in a game of whack-a-mole.”
A senior financial services executive specialising in cybersecurity, privacy and spam also received the unsolicited messages from TAL repeatedly, even after attempting to unsubscribe.
The executive, who asked to remain anonymous due to his job and public profile, also tried unsuccessfully to get action from TAL over what he said appeared to be unlawful marketing.
“Both the US and Australian spam acts specifically prohibit the illegal harvesting of personal information and … this would appear to be the case here,” the executive wrote in a complaint to TAL’s chief executive Brett Clark.
The executive said he wrote to TAL after receiving more than one email despite unsubscribing and blocking the email sender’s domain. Each email had a different domain name but the same Spanish IP address.
“This made it highly suspicious spam,” he said.
He said there could be no reason for any legitimate digital business to vary domain names in communications unless they were trying to evade ISP blacklists and blacklists created by their targets. “No other reason can exist,” he wrote.
The executive said he had never been a customer of TAL or its direct insurance operation Insuranceline, and had not consented to receive commercial offers from the company.
TAL’s campaign comes as the $450-million-plus-a-year funeral insurance industry faces a regulatory crackdown after being described as a “low value” product in the royal commission into financial services.
According to APRA’s latest statistics, funeral insurance has the worst claims payout ratio of any life insurance product at 23 per cent, followed by consumer credit insurance at 26 per cent and trauma insurance at 40 per cent.
“When funeral insurance is returning a paltry 23 cents in the dollar in claims for life’s only truly certain event – death – then something is deeply wrong,” Mr Brody said.
The low payout ratio can be due to exclusions, for example when a policy only covers for accidental death in the first year or two of coverage. TAL’s successful claims rate for funeral insurance is 41 per cent, above the industry average.
Banking royal commissioner Kenneth Hayne recommended that the Australian Securities and Investments Commission consider using its product intervention powers in relation to funeral insurance.
The marketing campaign rolled out by TAL’s direct insurance subsidiary Insuranceline did not breach anti-hawking laws on financial products, which only cover unsolicited phone calls and meetings, not emails or media ads.
Mr Brody said he had seen similar pressure marketing tactics used in other industries. For example, the Vocational Education and Training (VET) Fee-Help scandal, which resulted in unscrupulous training providers signing up students for courses that didn’t meet their needs and left them with significant debts.
“It’s a deadly combination – unscrupulous sales incentives combined with highly emotive marketing about reducing the burden on loved ones when you die,” he said. “Our centre continues to receive complaints about funeral insurance … what the clever marketing won’t tell you is that if you cancel, you lose all your money.”
Data harvesters who cannot properly explain consent are almost always criminal organisations who also engage in online fraud, ID theft and third-party phishing.
Email to TAL from a cyber-security executive
TAL denies it has breached any regulations or that some of the emails it sent were unsolicited. It said before it begins any marketing campaign it ensures it is compliant with all relevant laws and regulations.
It said sending unsolicited emails was not part of TAL’s marketing activity.
“Any email marketing campaigns rely on having obtained consent by individuals to receive marketing materials and we believe this is an appropriate way to create awareness around our products,” TAL said.
“These emails are intended to provide information to potential customers, who can engage with the offered product or not, at their complete discretion.”
TAL said it supported ASIC’s proposed ‘anti-hawking’ changes to further strengthen industry sales practices
In the case of the complaint from the executive, TAL said it “revealed a more complex supply-chain than we previously understood to exist and as a result we have implemented the changes … and have strengthened our operational processes”.
This included reducing the number of parties involved in any single email marketing campaign for Insuranceline and ceasing work with the particular “publisher” sub-contracted via the third party for that campaign.
But, based on the information available, it said it had no cause to pursue sanctions against any of the suppliers involved.
Adele Ferguson is a Gold Walkley Award winning investigative journalist. She reports and comments on companies, markets and the economy.