ClearView Wealth Ltd’s [ASX:CVW] share price continues to fall, after admitting to breaking the law with more than 300,000 outbound sales calls.
At time of writing, the insurer’s shares are trading at $1.02, down 42% from its peak on 23 January.
Royal Commission findings
As reported by the ABC, any breach of the anti-hawking provisions of the Corporations Act — which prohibit any selling of financial products in non-voluntary calls — is a criminal offence.
ClearView was the first insurance company to take the stand in the Royal Commission into the finance industry.
On Monday, ClearView’s chief actuary and risk officer Gregory Martin was prosecuted in regards to the insurer’s aggressive sales tactics and work environment.
Mr Martin stated that the company, which made outbound calls until 2017, retrieved the data of potential customers from external companies and was unaware as to whether or not the people on the lists had consented to receiving calls.
When asked directly about the breach, Mr Martin described ClearView’s actions as a ‘mistake’, stating that the company failed to understand that it was violating any laws at the time.
As reported by the ABC:
‘“By early May 2017, ClearView had estimated that it had breached the anti-hawking provisions, which as we’ve discussed was a criminal offence, somewhere between 300,000 and 303,000 times over a period of just over three years?” Senior counsel assisting Rowena Orr QC put to Mr Martin.
‘“Yes, that’s correct,” Mr Martin agreed.’
Mr Martin also confirmed that up until 2016 ClearView was in fact targeting people from lower economic status. He highlighted that the culture of ClearView’s call centres used to be ‘full-on sales culture without much regard for customers’. Further evidence will be provided in regards to this.
What to expect for ClearView’s share price?
ClearView has been experiencing a downward spiral since the beginning of the year, after reaching its highest value in late January of $1.75.
There will in all likelihood be repercussions from the Royal Commission, but investors will hope that ClearView will be able to turn this situation around somehow.
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