ASIC has launched legal action against a man accused of defrauding businesses by claiming to sell insurance policies when the policies did not exist.
According to the regulator, Victorian man Samuel Tessa took money from businesses and individuals, claiming it would be used to pay for insurance premiums. But no policies were taken out for the intended recipients.
An unspecified number of businesses in the Melbourne area, particularly those involved in automotive repairs, were allegedly targeted as part of the ruse.
Mr Tessa has pleaded not guilty to five counts of obtaining financial advantage by deception. He has been committed to stand trial in the County Court of Victoria on 25 November 2019.
The charges were first laid in December 2017 following an investigation by ASIC.
ASIC has been approached to provide more details on the case.
It is not the first time this year that action has been taken over the sale of bogus insurance policies.
In August, a former broker based in regional Victoria was permanently banned from providing financial services after pleading guilty to seven counts of stealing client funds.
That raised concerns among business leaders that they could be left uninsured if their broker, or even insurance company, had pocketed their premiums without providing working insurance cover.
But Campbell Fuller of the Insurance Council of Australia told My Business that such cases are exceptionally rare.
“There have been very few cases in Australia,” he said at the time.
Mr Fuller urged business owners to ensure all policy details and receipts are in writing, and that such documentation is independently verified with the relevant insurer, to avoid any nasty surprises should a claim need to be made against a policy.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.