The industry ombudsman has ordered Hannover Life Re to give a full premium refund to a man who was sold funeral cover and was then harassed when he failed to pay the fees.

The insurer sold the policy unfairly and in breach of consumer protection legislation, the Australian Financial Complaints Authority has found.

The man bought the cover in 2013 during an unsolicited phone call – which is against anti-hawking laws – and a product disclosure statement was not provided until after the sale.

The customer was also misled about stepped premiums.

Hannover Life Re could not find a recording of the call and said another company rang the man. It had no records of what that company told the customer.

It did not have a copy of the insurance application – the ombudsman says an insurer should have a copy for every policy.

The man said he was told the starting premium but not that the policy had stepped premiums.

Although Hannover Life Re presented a sales script, the ombudsman accepts the man was not told premiums would increase with age.

When the customer missed premium payments, the insurer called him several times, left dozens of voicemails and sent dozens of SMS messages.

While it is important for an insurer to tell someone if they miss a payment, when a customer does so frequently “that should indicate to an insurer that they might not be able to afford their policy”, an AFCA ombudsman says.

“I am satisfied that its very frequent contact chasing missed premiums, while not directly addressing the question of affordability, amounted to harassment.”

AFCA also finds that in 2016 the insurer inappropriately tried to sell the man a further policy.

It had recordings of two phone calls, with the insurer trying to sell life insurance and accidental death cover on one of them.

The insurer did not give a fair explanation of the death cover and continued to press for a sale, saying the man could cancel during the cooling-off period.

As well as refunding all premiums paid, AFCA says Hannover Life Re should pay $4500 compensation for non-financial loss arising from its conduct.

See the determination here.